Humanity has valued gold throughout its entire history. Even today, it is a popular safe-haven investment that investors use to protect their portfolios against the volatility of fiat currencies. According to Schiffgold's Michael Maharry, this is no coincidence, but rather a logical continuation caused by the physical properties of gold: they make it an excellent – or even natural – form of money.
Even the ancient Greek philosopher Aristotle stated that a good currency must be durable, portable, divisible, and have intrinsic value. Since gold meets all four criteria, it has naturally been used as money for most of our cultural history.
However, current economic systems do not value gold, as they rely on easily manipulable and printable fiat currencies that support government spending. They require 'management' by central banks, which usually leads to artificial booms and encourages poor investments or misallocation of wealth.
Gold is a natural, physical resource that is mined from the earth. Therefore, it does not require management: gold does not decay, and its supply increases as it is mined – which has naturally aligned roughly with the growth of the world's population and the rate of new wealth creation.
Gold is also stable, allowing for stable economic calculations: its average annual growth has been 1.2% over the last 529 years. The growth rate of the dollar has fluctuated from 1 percent in 1993 to 19.1 percent in 2020, causing harmful volatility.
Government fiat currencies suffer from counterparty risk because they are essentially state promises – and a promise can always be broken. Gold, on the other hand, is physical and stable: its reserves have increased 3.5 times compared to the 1950 reserves, but one gram of gold still buys the same amount of crude oil today as it did in the 1950s. And the same gram of gold mined today is identical to the gold nugget mined by ancient Romans.
Kitco: LBMA predicts good times for silver
The world's largest precious metals investors conference encourages a positive outlook on the markets, even though the year has been overall challenging for precious metals.
Rising inflation has scared investment capital away from the markets, and central banks have tightened their monetary policies. Nevertheless, according to surveys conducted with representatives at the London Bullion Market Association's Global Precious Metals conference, the value of gold is expected to be significantly higher in a year: forecasts suggest it will rise by nearly 12% and will be around €1,859.05 next year.
While representatives expect a bull market for gold, their hopes for silver are even higher: they believe its value could rise by as much as 54% – in October 2023, the price of silver should be around €28.75.
Attracting the interest of bulls is likely not easy in the near future, as the U.S. Federal Reserve plans to raise interest rates even higher. However, many analysts believe that rates will peak in Q1 2023, after which gold and silver will receive the boost they deserve by Q2. The historically high premiums for silver indicate that it is still considered a valuable safe-haven asset.
