Lear Capital Reviews the State of Precious Metals Investing in New Series

• (Photo : the blowup on Unsplash)

Lear Capital founder Kevin DeMeritt has assembled a panel of esteemed investment and financial professionals to provide regular commentary on the U.S. economy and gold and other precious metals' current value, offering insight into the industry's status and investment potential.

New installments to the series of videos are being shared weekly on the precious metals firm's YouTube and TikTok channels and touch on topics ranging from inflation's effect on saving to the likelihood a recession may be imminent.

The higher interest rates consumers are now paying - a byproduct of increases the Federal Reserve made to the federal funds rate's target range to help lower inflation - and the associated impact on their overall purchasing power have helped stoke concern a downtown will occur, according to Kevin DeMeritt.

"They're used to 3.5%, 4% mortgage rates, and then it goes up to 6% or 7%," he says. "At some point, you're going to want a new car, and the interest rate is going to be higher there, as well. Slowly but surely, your bills go up, and everything else is going up." That's one of the reasons DeMeritt says the U.S. has been teetering on a recession since 2022.  

Is the U.S. Facing an Ominous Economic Outlook?

In an informative clip that Lear Capital posted on TikTok on Sept. 14, financial analyst and investment adviser John Rubino discussed some of the seasonality aspects that may affect gold and silver asset demand and pricing.

According to Rubino, precious metals have a tendency to go down in price during the summer, and then rise in winter.

"If you look at a long-term price chart for either metal, you see it does indeed happen," he said. "Which makes now, September, a pretty good time to be buying gold and silver - and Lear Capital can help you with that."

Other recent reports have indicated precious metals activity may be on the upswing.

Last year, central banks' gold purchasing rose 152% from their 2021 total - prompting Kevin DeMeritt to note we hadn't seen that kind of buying from central banks for 50 years.

"Central banks purchased a quarter of all the mining supply," he says. "Which is a huge jump from their previous activity."

Despite central bank gold purchasing slowing in the second quarter of 2023, factors such as jewelry-based usage demand and investment interest helped support gold prices, according to a World Gold Council update published in August.

Gold bar and coin investment grew 6% year over year in the second quarter, and the London Bullion Market Association gold price average reached a new record, $1,976 per ounce - a 4% increase from the previous record high achieved in 2020's third quarter.

The annual global investment in gold coins and bars increased 10% in 2022, according to the World Gold Council.

"If [central bank interest] continues into 2024, the demand will start to move up significantly - along with demand from institutional and individual investors," Kevin DeMeritt says. "When investors are worried about the economy, usually you get more people turning to gold, which can drive up its price. We're starting to see that more and more."

Rising Uncertainty Surrounding the Next Steps for the U.S. Dollar

In addition to the Lear Capital video series, the Los Angeles-based company, which has served more than 90,000 satisfied customers since opening its doors in 1997, also recently released a new report, The Tipping Point, that deals with the rising threat to the U.S. dollar's status as the world's reserve currency. 

The report explains why there are rumors that five of the world's largest economies, known as the BRICS nations - Brazil, Russia, India, China and South Africa, which collectively represent more than 31% of the world's GDP - might introduce a gold-backed currency, and what it could mean for the dollar and U.S. consumers' spending power.

If the BRICS nations were to introduce a gold-backed currency, Kevin DeMeritt says that with the U.S. deficit currently standing at approximately $960 billion and the other countries operating with a surplus, a massive wealth transfer could occur.

After its recent summit, held in August, the group of nations announced that six additional countries had been invited to join BRICS - Iran, Saudi Arabia, the United Arab Emirates, Egypt, Argentina and Ethiopia; this could potentially give the group more influence in the future.

"Precious metals have had a critical role in currency and finance for 8,000 years," the author of The Tipping Point, Rachel Mills, Lear Capital global financial research specialist, said in a statement. "There is no logical reason to believe the world's patience and trust in the U.S. dollar will last indefinitely."

While the strength of the dollar has fluctuated, since 1990, the value of gold has generally risen, with prices starting at $386.20 and climbing to $1,813.75 by 2022.

"The volatility of gold is not going to be the same as other investments," Kevin DeMeritt says. "It typically is going to give you more stability. Gold is used as a safe haven during recessions, war."

Stay tuned for additional economic updates from Lear Capital's panel - which includes money manager Michael Pento; Robert Kiyosaki, author of Rich Dad, Poor Dad; and Judge Andrew P. Napolitano, who served as a senior judicial analyst for Fox News from 1997 to 2021 - on TikTok and YouTube in the coming weeks.

For more information on purchasing gold and silver assets, including current precious metal price charts and other resources, visit Lear Capital's website, learcapital.com.