Gold and Silver Prices Fall as Debt Crisis Fears Subside
Gold and silver prices have seen recent declines as markets react to potential resolution on the US debt ceiling crisis. However, these precious metals remain solid long term stores of value. Their purchasing power does fluctuate over time, contrary to some investor beliefs. But gold and silver have vastly outperformed stocks since 1968 when the gold price became free floating.
Gold hit near $2000 per ounce in late February. It then rose on banking crises and debt ceiling worries. With potential US default averted, gold has fallen back to around $1965 currently. Silver has followed a similar pattern. Seasonal fabrication demand weakness now typically weighs on prices over the summer months.
While fluctuating, gold has handily beaten stocks since 1968. In real and nominal terms, gold has dramatically outpaced the S&P 500. Despite periodic underperformance, gold has proven superior to stocks over the long-run. Precious metals can play an important role in a diversified portfolio.
This overview of gold and silver’s long term investment value shows they merit consideration. Past performance does not guarantee future results. But the historical record makes a compelling case. Precious metals help balance paper assets like stocks and bonds.
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