Four Precious Metals Megatrends Are Rapidly Unfolding

By Joshua D. Glawson

Although no one can absolutely predict how these megatrends will influence prices, these factors represent bullish fundamental drivers for the major precious metals.

When governments overspend or overprint, their currency decays. As the value of unbacked currencies bleeds away, demand for investing in precious metals, especially gold, tends to rise.

But that net selling has turned to net buying since 2010 and has accelerated. In fact, central banks bought more gold in 2022 than any year in a half a century, and 2023 is looking no different.

Central banks are accumulating gold due not only in response to economic uncertainty, but also to hedge against weakening currencies, diversify their portfolios to mitigate risk, insure against U.S. capital controls, and safeguard national financial systems.

This net demand is spilling over into other areas, and the trend of gold buying is accelerating across the globe, particularly in the Far East and the Middle East.

Do the “powers that be” know something the public doesn’t?

Common uses for platinum include catalytic converters for automobiles, catalysts in chemical industries, fiber optics, LCDs, pacemakers, spark plugs, cancer treatments, jewelry, computer parts, and weaponry. Investment demand has been increasing too.

Most have heard the buzz phrase ESG, which stands for “Environmental, Social, and Governance.” ESG aims to starve companies of access to capital and stymie regulatory approvals if they do not adopt specific programs and practices.

In the mining sector, this trend manifests through environmental practices, hiring practices, miners’ pay, mining health conditions, and extra payoffs to local communities.

There are three categories trending in the so-called ethically sourced precious metals industry.

Fairtrade metals are derived from mines in which miners are paid a higher-than-average wage.

Meanwhile, the countries that tend to embrace these notions are usually allies of the U.S., and the “non-compliant” countries tend to be on the “outs” with the U.S. – raising accusations of political astroturfing and bullying.

Given how much precious metals the U.S. and its allies, along with other countries, may wish to acquire, ESG schemes may provide another way to control the marketplace.

These “ethical sourcing” ESG models in the precious metals industry are largely in sync with the global “climate change” agenda, which seems more about imposing top-down controls on the economy rather than caring for employees, local communities, or even the environment.