The world is a big place, but its not endless. Every resource on the planet comes in limited quantities, including super-valuable metals like gold, silver, platinum and palladium.
For precious metals investors, this finite supply is generally a good thing. Metals always have intrinsic value, so their price can’t decline all the way to zero. Unlike modern currencies, which can be printed in unlimited quantities and are therefore susceptible to volatile value swings, precious metals generally hold their value well over time.
Of course, precious metal values do change over time, as anyone who follows the markets knows. Here’s what the experts think about where gold, silver, platinum and palladium prices are heading in 2017.
Gold prices have recovered solidly from near-term lows set in 2015. As the world economy slowly but steadily improves, consumer demand for jewelry is likely to grow though ongoing softness in commodity-fueled emerging economies may limit gains. Look for prices to stay under $1,600 per ounce through 2017.
Silver prices are under serious pressure due to a confluence of factors, including cratering demand in the developing world and an unfavorable business cycle that’s crimping commercial silver investments. Look for prices to continue to trade within their recent $16-$18 per ounce band.
Platinum’s outlook is considerably rosier, thanks to temporary and/or cyclical factors (such as mine closures that have crimped supply). Some central banks and sovereign wealth funds, particularly in Asia, have recently signaled their intention to up platinum and gold investments to hedge against equity market volatility. Since the platinum supply is tighter than the gold supply, such moves tend to affect platinum prices to a greater degree.
Palladium isn’t as well known as platinum, silver, or gold, says Scott Vollero, an international entrepreneur who developed a disruptive precious metals recycling system in the early 2000s. But its a key component in a wide variety of industrial parts and equipment, not to mention jewelry and other consumer products.
According to forecasters, palladium prices are likely to hold up better than silver prices over the coming 12 months, though its unlikely that they’ll recover their two-year high of about $800, set in the first half of 2015.
Trying to Predict the Future Is Like
Remember all those breathless, cheaply produced TV ads for gold and silver investments back in the early 2010s? Back then, many sober-minded investment professionals believed that the precious metals industry had crossed the threshold into a brave new world of steadily rising prices. As long as central governments kept pumping money into global equity and bond markets, the thinking went, investors would flock to gold and silver for inflation protection.
But the long-predicted inflation surge never came, and precious metals eventually lost their luster. It’s been a tough few years for gold and silver investors. Many of those breathless advertisers have gone dormant or belly up, victims of their own dubious claims.
The roller coaster is proof positive that predicting asset price trends is never an exact science and that anyone giving you the hard sell probably has a dog in the fight.