Could now be the right time to invest in gold and silver?

Precious metals gold and silver are often regarded to be secure investments for the future during times of turmoil.

In times of global market uncertainty, rising inflation risks, and geopolitical instability, gold often gains appeal, since it’s perceived as a safe-haven asset.

It has low correlation with other asset classes, meaning when the stock market is going down or when there are global political issues causing uncertainty, gold doesn’t necessarily lose value in the same way as stocks and bonds. That’s why Tony Coleman – managing director at New Zealand Gold Merchants (NZGM) says gold may act as insurance during falling markets and times of geopolitical stress.

Coleman has spent his life learning about these precious commodities – from his father initially – and has since become an industry specialist, thought leader, as well as NZGM managing director.

Here’s why he believes now may be the ideal time for investors to diversify their portfolios, with gold.

Gold’s continued rise

Gold prices have had a growth trajectory from USD $2,064.61 per ounce in January to USD $2,610.38 per ounce (as of 19 November 2024). Though past performance does not guarantee future outcomes, major world banks anticipate the precious metal to extend its price rally into 2025.

A primary force behind gold’s recent bull run is the purchasing activity of central banks worldwide. The World Gold Council provides data on central bank gold demand trends, highlighting significant purchases by countries like China, which have increased their gold reserves substantially.

According to Coleman, this perceived trend supports steady demand, reinforcing gold’s price stability and long-term growth outlook.

“While we have central banks around the world bulking their gold reserves, fluctuating confidence in the US dollar and tension in the Middle East, you’ll likely see more investors fortifying their portfolios with gold,” he adds.

Is it silver’s time to shine?

Like its golden counterpart, silver has emerged as an equal performer this year, with prices climbing from US$23.76 per ounce in January, to approximately $31.19 per ounce (as of 19 November 2024).

Price movements in silver typically demonstrate more dramatic swings than in gold due to its dual nature as both a precious metal and an industrial commodity.

This unique position means silver prices can respond not only to investment demand but also to industrial consumption patterns, particularly in growing sectors like renewable energy and electronics manufacturing.

The global push toward green technology, especially in solar panel production, continues to drive industrial demand for silver, potentially supporting higher prices.

China is the world’s largest consumer of silver, with its usage spanning across multiple sectors.

The electronics industry, for instance, relies heavily on silver for its conductive properties, which are essential in the manufacturing of smartphones, computers, and other devices.

Additionally, silver’s role in photovoltaic cells has made it indispensable in the production of solar panels.

Coleman says as China continues to invest in green technologies and infrastructure, the demand for silver is expected to rise.

“It positions China as a pivotal player in the global silver market, and ongoing investments in technology and infrastructure, coupled with its commitment to renewable energy, will likely continue to drive demand for silver.”

Advice for investors

Coleman says the fast-changing and highly uncertain age we are currently living through has made gold attractive to investors looking to diversify.

“The team at NZ Gold Merchants, with a long-standing history in New Zealand’s precious metals market, offers insights and expertise for both new and experienced investors looking for security in their portfolios,” Coleman says.

Some things to remember when first investing, after checking the global financial market, is to determine your investment objective (short and long term), make the appropriate investment selections and stick with your plan, he adds.

“Do not abandon your strategy on daily market changes and do not over-commit – only invest as much as you can afford.

“Always buy and sell through a respected, reputable dealer and aim to diversify and protect your investment against fluctuations in the value of any one asset type.

Visit the Go Gold website for more information.