Precious Metals vs. Steel: Comparing Returns North of the Border
Canadian Steel and Precious Metal Prices
Recently Canadian steel, silver and gold prices changed. Steel prices steadied in 2021 after jumping over 50% due to high demand and production worries in 2020. Silver and gold declined during the start of the epidemic, while gold rose to an all-time high.
What's happening with investors? Steel prices have risen over 25% since early 2020, but price inflation has moderated. Supply chain concerns and high demand will keep prices high through 2021, according to industry analysts. In the short run, steel producers and investors should experience strong returns. Forecasts from Trading Economics global macro models and experts put steel at 3584.52 Yuan/MT by the end of 2023.
Precious metals are riskier. Gold and silver price are fluctuating but 2023 highs. Some economists expect gold to reach record highs in 2023 if inflation or market instability rises. Others expect prices to stay or fall. The rate of global economic recovery and market mood will matter.
In Canada, is steel or precious metals a better investment?
Gold and silver beat steel during market turmoil and inflation. Steel relates to industry and manufacturing, whereas precious metals store wealth and hedge inflation.
Steel is safer than precious metals. Industrial steel demand and price are more stable and follow the economy. Precious metals fluctuate. Investor sentiment, geopolitics, and the US currency may substantially impact gold and silver prices.
Diversification: A Mix: Diversifying Canadian investors may find the optimum risk-reward mix in precious metals and steel. Gold and silver investments may hedge inflation and market losses. Steel investments are safer in a strong economy. Investing in both may increase commodities exposure and minimize volatility.
