From Coins to Conflict, International Wholesaler Offers Their Take on Several Key Issues Affecting the Precious Metals Marketplace in 2015
ADDISON, TEXAS (Jan. 13, 2015)—With the new year upon us, many investors and industry experts are offering their predictions for the 2015 precious metals forecast. Dillon Gage Metals, a leading international precious metals wholesaler, offers their take on several key issues ranging from general economic overviews and pricing to interest rates and geopolitical events.
Silver is Hot
Dillon Gage Metals predicts that the demand for silver is about to take a major upswing. “As 2014 drew to a close, we saw silver demand exceeding supply, and we expect this to continue into the New Year,” says Terry Hanlon, president of Dillon Gage Metals. “Much of the demand for silver came about as a result of the price decrease and its affordability relative to gold. In 2015, we will see more investors—especially Europeans—turn to physical precious metals as a part of a balanced portfolio.”
Interest Rate Hikes
With decent fourth quarter economic news in the U.S. compared to both Europe and Japan, the U.S. dollar has rallied. According to Roy Friedman, Executive Vice President of Dillon Gage Metals, interest rate hikes in 2015 are expected. The question is when and how many times. Two interest rate hike scenarios exist and delineate a contrast in the projected worth of physical metals for investment portfolios. “If an interest rate hike occurs early in 2015, additional hikes could follow, resulting in lower prices throughout the year,” Friedman advises. “If the hike occurs much later in the year, we may see a U.S. dollar sell-off, creating a rally in precious metals prices.”
Foreign Gold Investment
p>Worldwide central banks will continue on a path of buying gold, with Russia leading the way in the interest of combating economic sanctions from the West while shoring up an increasingly weak currency. However, China and India have also become major players in increasing their gold reserves. In addition, Germany should be in position to take advantage of falling gold prices in the European Union. “Although final figures for 2014 are not in from the World Gold Council, it’s likely to show consumer demand for gold was greatest in China, with perhaps India being second,” predicts Friedman.
Precious metals markets often react quickly and forcefully when geopolitical unrest arises. Last year was rife with tension in areas including the Middle East, China-Japan, the two Koreas and Russia-Ukraine. These conflicts could further escalate at any time, causing a spike in precious metals prices. “The unknown for 2015 is the severity of these tensions and their length of time,” states Friedman. “The longer tension remains high in a hot spot, the greater the likelihood of a spike higher in precious metal prices.”
Secure Storage Demand
With a projected uptick in silver buying, investor clients will be looking for safe and reliable storage, such as the kind found in secure depositories. “Unlike other precious metals, silver takes up a significant amount of real estate to store, and it is rather impractical to consider a private residence or a bank as a safe storage alternative,” explains Alisa Moen, president of Dillon Gage Metals’ International Depository Services Group, located in Delaware and Ontario. “Because silver as an investment asset is gaining popularity among traditional market participants and individual investors, we anticipate significant growth in the silver storage demand.”
Bullion Coin Anti-Counterfeiting
Anti-counterfeiting will expand in the bullion industry, courtesy of the Royal Canadian Mint (RCM). In January, the RCM is expected to formally announce an expansion of their anti-counterfeiting technology that debuted on the one ounce Canadian Silver Mapleleaf Coins in 2014. Known as Bullion DNA Anti-Counterfeiting Technology, the process includes encoding a unique security mark engraved on dies and imprinted on each 2015 Gold Mapleleaf Coin. Images of each encoded coin will consequently be scanned and stored in a database held by the RCM, validating the authenticity of each purchase.
The rare coin market is always looking ahead for the next big thing. Ernie Palms, division leader of numismatics for Dillon Gage Metals, notes that U.S. Silver Dollars from 1878-1935 will continue to be a hot item. “With silver dropping in price, these silver dollars will become more attractive to investors because their premiums usually hold value in a declining market. We expect this to continue in 2015.” Also, the RCM will soon be releasing the next two coins in their Canadian Silver Wildlife Series, the Hawk and the Owl. Previous releases for coins in this series have all sold out.