Gold prices took a major tumble in the middle of April 2013. The main reason cited by many experts was the fall in inflation around the world. Falling inflation means that gold is no longer the valuable hedge it was previously and investors are wondering why they need it. The fall was an unpleasant surprise for many gold investors who had expected the rise in value to continue. Many pointed to the Federal Reserve’s bond buying program which was expected to provide stimulation to the economy and thus improve the value of gold. Things do not look positive for gold as the price fall is just one more point on a long list of reasons to sell. At the same time, the list of reasons to buy rare earth metals continues to grow. Unlike gold, which has no intrinsic value, these metals are actually useful in a number of industrial applications.
Why Rare Strategic Metals Are Rare
The term “rare” here is a little misleading. The rarest ones are still hundreds of times more common than gold. These metals are found all over the world, but only in a few places have they been found in sufficient supply to make mining worth it. These metals are usually found clumped together due to their similar properties. The clumps also contain radioactive minerals like uranium. This clumping tendency means that the metals must be extracted via difficult and expensive processes. Extraction uses a lot of electrical energy also produces toxic radioactive waste. China is presently the main producer of rare strategic metals, partly due to the fact that it has a relaxed attitude to environmental pollution. China is also the main user of these metals and is exporting less to the outside world while retaining most of what it produces as its demand grows. These factors make rare earth elements more costly and the need is not likely to go down any time soon.
How Rare Strategic Metals Are Used
These are the elements on which modern technology runs. Examples of how they are used include:
- In making magnets for electrical motors
- For the rechargeable batteries that power hybrid vehicles
- In flat panel displays for computers and televisions
- To make various types of medical and military equipment.
The importance of these metals for technological innovation is why they could make a good addition to your portfolio.
Investing in Rare Strategic Metals Versus Investing in Gold
While trading in precious metals like gold is almost as ancient as civilization itself, trading in rare strategic metals is fairly new. Much of the world’s gold has already been exploited and is in the hands of the top investors, with very little to be gained by newcomers at the bottom. With these metals (as with many other types of commodities) those who get in on the ground floor are likely to see the most benefit as the market grows. Another benefit of trading in these metals is the fact that they are not sold on exchanges, so trade is restricted. The restriction lowers your likelihood encountering fraud when compared to gold. You will get options simply due to the fact that there are many different rare metals to trade, compared to just one on the gold market.
While gold has proven itself over time, demands do change. Those investors who want to be players in a newer market now have the opportunity. Rare industrial metals present the stability and potential for growth that you should be seeking from your investments.
Click here to contact Swissmetal Inc. for a free consultation on asset protection strategies and the acquisition of rare strategic metals.