Is now the time to buy Precious Metals Shares?

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Is now the time to buy Precious Metals Shares?

Investing in Precious metals seems to have been paying off especially if you have been buying silver as the price of Silver has reached $US19.62 at time of writing which shows a great interest of people are seeking to beat inflation by parking their money into assets that hedge against it and protect them against interest rate rises.

But buying the asset Vs buying shares in companies that produce the asset have always been a highly debated topic amongst investors as when you purchase the physical product you have it in your possession and rely on more people buying into it. Vs buying shares in a company that pays dividends and increases in value if the company produces more gold or silver.

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Lockdown impacts on Precious Metal Mining

COVID19 has impacted many industries but has also provided some really good entry positions if you're looking closely. During the pandemic mining operations shut which reduced output and amounted to $8.8 Billion in losses in precious metal output from 2020 and the following years didn't do the sector any favor's.

Significant carnage was felt in April - May this year when the stock market crashed due to mass selling of shares further impacting precious metals sector. But now that the pandemic is finally leaving our shores and 2023 is looking like a brighter future for all. The question needs to be asked if now is the time to invest in precious metals stocks?

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The Future of mining precious metals

While the downturn is painful it won't be forever especially with the new renewable future on the horizon with many renewable energy industries relying heavily on the precious metals sector. Platinum is a highly used precious metal in the development of Hydrogen fuel cells and a lot more scarce than gold.

We have already seen the impacts on Palladium price which is currently the go to renewable precious metal but in this next iteration of renewable energy we can likely count on Platinum being utilised a lot more in fuel cells. If that is the case than we can look forward to platinum quickly shooting beyond the price of Gold.

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Silver shouldn't be over looked

It is important to note that Silver is the precious metal of Tech and widely used in the industry which the renewable energy sector heavily relies on to function. Automation is a common feature to ensure everything runs smoothly and as Silver becomes more sought after there are opportunities for it to do a lot better.

In fact Silver demand has been surging and much of it is ending up in private land fills which is an important topic to touch on for a moment. Because once Silver becomes scarce or isn't meeting demand the quickest, easiest and cheapest place to mine for it will be in private landfill.

We scorn as we hear about people throwing out hard drives with a bitcoin on it, but in truth the silver in that computer and hard drive may very well be worth more than the Bitcoin that has been turfed.

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No Silver left

Some have tipped by around 2200 there will be no silver left to mine and even though I won't be around by then chances are my kids, kids, kids will be so what a wonderful opportunity or risk to take that if I stack now I could be changing history for my future generations with "old money". Although the probability of social destruction and war is probably also a factor in which case the price of Silver will increase either way.

But back to the original post, now that COVID is ending and mining resumes is now the time to invest in precious metal mining stocks before those $8 Billion dollar losses from locked down mines regain?

image sources provided supplemented by canva pro subscription. This is not financial advice and readers are advised to undertake their own research or seek professional financial services

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Wouldn't they just go out to space to mine Silver? I am not sure if it exists there yet but by then I think it might be economically and technologically viable to get it there.

I don't think you can go wrong getting some silver because it's part of a lot of different products so the use case is there but I am not so sure about the rest.

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The cost of this will remain prohibitively expensive until technology is invented to break Earth's gravity without the use of fossil fuels.

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True but we got decades ahead of us before that case even happens and it might happen.

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Good perspective and one that I relate to thinking about but not as pervasive as you did. It makes sense though these metals are important! I think investing a little bit in the companies that mine them is going to be a decent route to take.

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I've definitely been looking at it and it looks like a viable option

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I don't think this is really an option.
The only option for PM is to do what the central banks and governments around the world are doing.
Which is buy the physical asset and secure it locally.

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Precious metals are in that space that everyone should be watching especially with China and Russia building their own currency and buying up vast amounts.

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yeah but better to buy gold :p more secure more stable

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That is the added benefit in dips you don't suffer the losses and wear all the gains

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(Edited)

When I have any spare excess cash above my Emergency Cash reserve.
I was thinking of a few mining companies in a TFSA vehicle but have to consider the possibility of my government deciding to nationalize the mines should they get economically desperate.
Again, it's another form of counter-party risk.

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Nationalising the mines would be something that is seen coming. No talks of that and they're internationally owned so I am not sure if it would be that easy.

Good risk though.

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