Why Investors Are Buying Gold And Silver

There's a big divergence between the precious metals investing behavior we see in the West and the East. Investors in the East often view gold or silver as a form of savings, while investors in the West are often more focused on inflation and the latest gyrations from the Federal Reserve.

Yet there's also another component that's prevalent in the West, particularly among silver investors. That comes down to a simple distrust of government and a desire for asset protection.

I've been fortunate to have the pleasure of meeting famed investor Jim Rogers, and getting a chance to interview him a few years ago. And one highlight that always stood out to me was when he mentioned, "whenever people lose confidence in governments and money, they always buy gold and silver."

Of course with government debt loads around the globe soaring out of control, with little evidence that there’s a plan that could even feasibly address a restructuring of the debt, confidence in government is waning. And one of the reasons why many of the longer-standing precious metals investors continue to invest.

Last week, ahead of what already looks to be one of the more contentious presidential elections in the US, the Bureau of Labor Statistics admitted that the US has created 818,000 fewer jobs over the last year than previously reported. Something that has long been suspected in the financial community, and has now been confirmed.

Then on Tuesday, Facebook CEO Mark Zuckerberg dropped the bombshell that:

"In 2021, senior officials from the Biden Administration, including the White House, repeatedly pressured our teams for months to censor certain COVID-19 content, including humor and satire."

Recently, there were also comments from Kamala Harris where she was discussing the idea of government takeover of companies' patents and mentioned:

Dictator Kamala Harris discussing government takeover of companies' patents:"I will snatch their patent, so that we [the American government] will take over. Yes we can do that! The question is: 'Do you have the will to do it'!? I have the will to do it."The party… pic.twitter.com/fLTZE1pagq

— Eric Abbenante (@EricAbbenante) August 17, 2024

During the bank failures in March and April of 2023, we saw a surge in gold and silver buying because people were scared about the safety of their money in the banking system. And regardless of political preference, when gold and silver investors hear comments like what Harris said, or her suggestions of price controls, it makes them incredibly nervous.

Similarly, comments by Donald Trump VP candidate JD Vance about his support of a dollar devaluation have had a similar effect. So this is hardly an issue affecting just one party.

Especially in an environment where there are growing concerns about the security and safety surrounding paper assets , concerns of government overreach and asset protection are often just as important to precious metals investors as the more financial factors like the Fed's latest policy or the supply and demand of the metals.

Keep in mind that you don't necessarily have to agree with some of the reasons that drive people to purchase precious metals. But in understanding what's happening, and more significantly, what's reasonable to expect going forward, hopefully this sheds light on one of the less quantifiable, yet still significant drivers of gold and silver.

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To get a copy of our free report explaining why we’re seeing a revival in the gold market, just click here.

Source: ArcadiaEconomics.com