The Chinese symbol for crisis consists of two characters, one meaning “danger” and the other “opportunity”. We are still in the first half of this decade, but already everything points to the conclusion that the Eighties will be a time of extreme instability. And what could be more rewarding during such a critical period than understanding and exploiting the price trends of those investment vehicles which are the very barometers of economic and political uncertainty: precious and strategic metals.
Hundreds of books, web sites and theses, and thousands of newsletters and reports have been written about this subject. Most deal with the chemical properties or applications of a metal, describe its history, or specialize in advocating one investment vehicle over all others. As a professional, I find all these works very interesting, but most people have no practical use for the findings of a chemical engineer or historian; instead, they want to know how to put their money to the best use.
And making the right decision when investing in precious and strategic metals is not an easy task. Professional dealers have responded to the explosion in investor demand and the accompanying unprecedented price volatility by creating a confusing array of new investment vehicles. Besides the traditional alternatives of bullion, storage certificates, mining shares and collectibles, there are now such things as options, metals accounts, toll-free telephone trading facilities, and even savings passbooks denominated in gold!
The purpose of this guide is to illustrate the way in which each alternative has been designed to cater to a specific investment objective. It will also detail the advantages and pitfalls to be found in each of the strategies available to today’s private investor.
There are also significant differences between the groups of metals we call “precious” and those which are termed “strategic”. Both have drastically different characteristics and respond to different events and developments. And even within each group you will find metals which suit your particular investment strategy, and others which don’t. This guide will familiarize you with the economic and political circumstances which cause each of these metals to decline in value, as well as with the developments which can lead to ongoing price appreciation.
But no guide about a financial market would be complete without a close look at those who make it. In the course of our study, you will learn about the feud between fundamentalists who predict market action by trying to understand the forces of demand and supply, and those who do the same by simply looking at a chart. You will read about the powerful London bullion dealers who receive cash for every ounce of gold they sell, and their counterparts in the New York , Chicago and Hong Kong futures markets who deal in billions and yet rarely get to see the gleam of the metals they buy. And finally, you will learn about the politics of precious and strategic metals. After all, those who used them wisely have always ruled our planet — and by the look of it, they always will.