The economy may be facing uncertainty, but precious metals remain a solid option for those who are looking to diversify their portfolios.
As we enter 2021, many of us are glad to have reached the end of one of the toughest years of our lives. However, the difficulties as a result of COVID-19 are far from over, and we can expect to see the long-lasting effects on economies worldwide. 2020 also pushed individuals into safe-haven assets, including precious metals. As their prices climb, precious metals can offer a portfolio solution that you need to protect your assets during challenging times such as these.
Here, we delve into the economic events that COVID-19 has triggered and the lifeline that precious metals can offer.
Precious Metals Shine During Times of Economic Unrest
When the economic impact of the coronavirus began to take effect in spring 2020, we saw a major market crash. Stocks spent months trying to climb back up from their lows. Unemployment rates soared. Small businesses closed temporarily—and then many closed for good. The government provided trillions of dollars in stimulus money, thereby entering new levels of debt. As a result, interest rates have dropped, and the value of the U.S. dollar has weakened.
Meanwhile, precious metals dominated in price gains in 2020. Physical gold and silver from reputable distributors, such as U.S. Money Reserve, can offer a safe haven during times of political and economic uncertainty. In fact, gold had its best annual performance since 2010, breaking consecutive record prices before reaching its highest price in history. As a result, savvy portfolio holders have diversified their portfolios with gold coins and other precious metals over the last few months.
As we look ahead, many are wondering about the outlook of the economy and the prices of precious metals throughout 2021.
Economic Uncertainty in 2021
Some financial experts have noted their concerns about the effects of federal debt, which are likely to be major. After all, during 2020, the annual U.S. budget deficit reached a record-breaking $3.132 trillion. Reuters calculated that this tripled the debt from the previous year. The federal debt has exceeded $27 trillion, and the dollar is losing favor on an international scale.
“This needs to be addressed, or else future generations of Americans will still be paying the price in decades to come,” says Maya MacGuineas, president of the Bipartisan Committee for a Responsible Federal Budget.
“The single greatest risk that we are dealing with today is the loss of the U.S. dollar as the reserve currency,” adds billionaire Sam Zell.
On top of this, many financial experts are concerned that stock market could be in bubble territory and could be due for a correction in the near term. Various established organizations, such as MarketWatch, Business Insider, and The Wall Street Journal, have made their predictions about whether much of 2021 will simply be a repeat of 2020. We will likely know sooner rather than later, as this depends on the current virus transmission, variants, and vaccine efficacy.
Precious Metals Offer Security
As we search for solutions to this economic unrest, many portfolio owners are seeking security in precious metals from U.S. Money Reserve. Following the banner year, many market analysts expect precious metals to perform well again in 2021. Some experts even expect the prices of gold and other metals to rise yet further this year. Meanwhile, palladium is likely to grow on a manufacturing rebound: Citi’s analysts say the precious metal could reach $3,500/oz. this year.
If you would like to learn more about diversifying your portfolio with precious metals, get in touch with U.S. Money Reserve today.
About U.S. Money Reserve
Based in Austin, Texas, U.S. Money Reserve has spent the last 20 years developing client relationships across the nation. The company is a leading provider of government-issued precious metals, including gold, silver, and platinum coins, as well as palladium legal-tender products.
As a result, U.S. Money Reserve is one of the largest private precious metals distributors in the United States and is highly regarded for its dedication to finding the best precious metals products for each client’s needs. The company has served more than 550,000 clients and goes above the industry standard to provide superior customer service, with the goal of establishing a long-term relationship with every one of its customers.
U.S. Money Reserve has received an AAA rating from the Business Consumer Alliance, as well as an A+ rating from the Better Business Bureau. It is also the only precious metals company led by a former director of the United States Mint.