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Gold And Silver: A Wise Investment?

Supply Constraint

Supply Constraint. Government or the Central Bank of a country can print paper currency seemingly without any constraint, but cannot print silver and gold, as they are the natural resources which can only be procured through mining. The supply of these commodities expands with more extraction and not through market and printing pressure. Hence these metals are not prone to devaluation.

Silver is used in many commercial industries, and hence its availability is becoming shorter and shorter day by day as gold stock also rises to the maximum level.

Gold fulfils the role of quasi monetary aspect as it is convertible for any currency of the world. Every Bank and Financial Institution accepts gold, because gold gains most in value even in any financial crisis.

Hunt Factor. During the Gulf War many oil producing countries refused to accept paper currency for the supply of petroleum. They asked the government for gold and silver as payment, causing stock of silver & gold to recede dramatically. There may be evidence of current massive market manipulation in the economy today, but these natural resources will not be affected by any manipulation. These metals will always attract investors who wanted their money safe, and available in case of any financial crisis.

Therefore it is better to invest than to try speculating for inflation in the shares market. Viability is supposed to be great for traders, but small investors should invest in the gold and silver market to keep themselves safe from the brunt of the current recession.

by: Tommy Panetta
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