Looking to Invest in Precious Metals? Matt Badiali Breaks Down the Metal Market
The fascinating world of finance lured Matt Badiali away from the study of his intended field of science. With a bachelor’s degree in the rigorous discipline from Penn State University and a Master of Science in geology from Florida’s Atlantic University, he was on his way toward earning a Ph. D. at the University of North Carolina when a friend recommended another path.
This friend respected Badiali’s interest in science, but suggested that he could use his intellect to pursue something that would still meet that interest but also add a diverse range of other opportunities he might never obtain in the field of science. Badiali was intrigued, but it was still some time until he was willing to adapt his path based on the advice of that friend. When he did, his life changed course in a way that he never could have predicted—and would never, ever want to go back.
Anyone who has received Badiali’s investing advice benefited from the influence of his friend who held a Ph.D. in finance. Many have realized returns of double-digit gains and even triple-digit in some cases. The friend’s intention of persuading Badiali to use his knowledge of science to create advice for the average investor achieved the goal of providing access to excellent financial information.
Since then, Matt Badialia has combined his dual passions for science and investing to offer one of the most sought-after and valuable knowledge bases in all of investing. By combining his passion for and experience in studying geology and global energy with his experience in investing, Badiali is able to provide one-of-a-kind insights into a world of investing that others can only dream of—and his subscribers and followers are the ones who experience the benefit. But what exactly does Badiali’s unique perspective bring to investors, and how can they learn to take advantage of his expertise?
In this article, we’ll discuss how Badiali’s unique newsletter provides high-level value for investors of all levels and backgrounds. Then we’ll examine the current U.S.—China trade war and how it’s affecting the world of investing through Badiali’s perspective. We’ll then look at the record-setting low prices of certain investments at this point in history, as well as considering how global conditions continue to influence stateside investing. Finally, we’ll look at what the data tells us about what the future holds and find out how Badiali made a very important discovery that could change your investment portfolio forever.
Providing Insights for Investors
With the launch of his Real Wealth Strategist newsletter with Banyan Hill Publishing in 2017, Matt Badiali reaches readers who know the value of his recommendations in the natural resources market. From his experience and his research, Badiali expects a change in energy consumption that shifts focus from fossil fuels to an electricity-centered world that waits only for battery technology to provide the capacity to “store enough power to supply a city.”
This kind of energy power has profound implications for the future of the world, as it could completely transform global economies as nations are able to spend significantly less on energy infrastructure moving forward. This could also have dramatic implications for global trade, as the energy industry transforms to an electricity-centered environment and fossil fuels companies must either adapt or disappear. It’s this unique turning point that will determine the future of global energy for years and even decades to come. Not only that, but it will also have profound implications for investors from around the nation as they try to boost their portfolios through wise investments and strategic moves.
His approach to research and investment prospects lead him to go anywhere to talk to scientists as well as CEOs about mines, oil wells and geologic data. He travels the world to develop the advice for his newsletter, and his research in Haiti, Hong Kong, Iraq, Papua New Guinea, Singapore, Switzerland, Turkey, the Yukon and the Mexican desert reveals the extensiveness of his preparation to advise investors with his expertise in mining, energy and agricultural industries.
Having traveled the world and spoken with some of the world’s most respected energy leaders and CEOs, Badiali has learned a great deal about what makes the energy industry tick, what it perceives as its greatest threats, and where it sees the industry moving forward in the future. Badiali has seen firsthand how these companies adapt quickly to changing tides and are able to produce more energy than ever before while spending far less than they ever have in their history.
However, there are other global effects at play that have been increasing as of late. As international policies and politics begin to intrude on free trade, we begin to see unexpected consequences that are much farther reaching than anyone could have anticipated. But what does all of this mean for investors, and how will it change their approaches to investing moving forward? To understand this, we must understand the way that the growing trade war with China is impacting our financial markets and investing opportunities. Fortunately, considering his international travels and experience with both domestic and foreign economies, Badiali is perfectly poised to offer a fresh perspective on the subject. He has recently spoken out on his thoughts relating to the global market for precious metals and how it will likely be impacted by the trade war between China and the U.S.
Examining the Dampening Effect of the Trade War
With a frank assessment of the market’s view of metals lately, Matt Badiali concludes that the current market hates metals. The news reports of the trade war with China seem to announce another hit on metals each day, and almost everyone knows that the trade war can slow China’s growth. He refers to the vast country as “the mouth of the world” that takes in raw ores, smelts them, builds products and ships them to the United States.
As this trade war grows and continues, China is likely to see some bumps in the road as they struggle to keep up sales amidst increased tariffs from the U.S. It’s unlikely that they’ll be able to enjoy the astronomical growth they’ve been enjoying for so long in the near term, despite promising metrics to show that there is little chance of them slowing down in the long term. That said, precious metals will likely take a minor hit as it pertains to tariffs in China, and that will reflect in prices and demand around the world.
However, Matt Badiali believes that the fundamentals remain strong for platinum even though the price continues to fall. The petroleum industry needs it, but the metal remains very cheap on the current market. He anticipates a bounce, perhaps as soon as the fears of a trade war fade and let the fundamentals produce a viable market again. Demand continues to exceed supply, and the situation may worsen before he expects improvement. The price for platinum may “rocket” when it eventually starts to rise.
This means that there may not be a better time than now to invest in precious metals, particularly in platinum. As the market is at a low point but poised to skyrocket as tariffs are sorted out, there might have never been a better opportunity to invest in platinum and see massive returns in only a short period of time. Smart investors who might not otherwise consider energy investments should be advised that if there were ever a time to jump into the fray, it may be now. Your portfolio will thank you once the prices jump back up again and you find yourself sitting on a substantial nest egg.
Setting Records for Low Prices
The United States Gold Bureau gives investors some reasons for optimism in the potential for the price of platinum to stage a significant comeback. While none of these figures are considered a 100% sure bet, nothing in investing ever is. That said, The United States Gold Bureau is the authority on these matters and is the best source of information for discovering exactly how prices will fluctuate in the future. Here are the biggest reasons for optimism according to the United States Gold Bureau.
- In the span of only 10 years, gold’s price exceeded $2,300 per ounce, a stellar achievement that more than doubled the price of gold. Even more astonishingly, it was four times more expensive than its silvery white lookalike palladium. In the current market, gold and palladium have a higher price than platinum. Gold has outpaced the price of platinum only two times in the past 30 years. This means that platinum’s low price is a massive anomaly when compared to gold, making it extremely likely that the price will rise back up—and soon. There’s no better time to invest in platinum than at this point in its history.
- The cost of producing platinum exceeds its value, and experts predict that miners cannot sustain the loss of $200 per ounce. A selling price of $900 and the mining cost of $1,100 creates an imbalance that experts expect to produce a supply deficit. This will essentially result in less platinum available than there is a demand for, and if basic economics teach us anything it’s that reduced supply leads to increased demand and significantly higher prices. This will turbocharge the platinum market more than we can possibly anticipate.
- Surging demand in China and India for platinum in the automotive, petroleum, glass, electronics and medical industries has created a deficit in the supply line. Meanwhile, dependency on and demand for platinum in these applications is only going to go up as more and more companies become dependent on it to create increasingly higher volumes of consumer products, particularly electronics. Platinum has become an integral part of the technologies of the future, and as they become the technologies of the present platinum will be one of the world’s hottest commodities. And with supply dipping lower, prices will only surge higher.
- One anomaly that confounds investors regards the price of platinum at a lower price than gold. While 2,800 tons of gold reach the market every year, platinum provides only 250 tons annually. The rarity of platinum that makes it 10 times scarcer than gold presents a vexing imbalance that concerns investors.
- The higher boiling point for platinum and a higher melting point that exceed that of palladium make it a more appealing metal for industrial purposes. Denser as well, the metal’s versatility provides the basis for driving demand. As more and more companies and corporations begin to recognize these advantages, more and more will seek to exploit them. This will lead to a dramatic increase in demand for platinum, a demand that will lead to (you guessed it) higher prices around the globe.
- After a crash that lowered the price of platinum to $793 per ounce, investors may choose to “rebalance their bets” and create an “upward momentum” that may reverse a trend. The price made it the lowest ever in comparison with gold, which means its poised for a major comeback. Now is the time to put yourself in a position to ride that comeback before you’ve missed the opportunity.
Considering the Influence of Global Conditions
The value of platinum that has applications in jewelry and in the production of diesel fuel ironically has fallen to a 14-year low. Matt Badiali points to the oddity of a price that is lower than it was during the financial crisis while the current supply is down. For the first quarter of 2018, the demand for platinum exceeded the availability by 125,000 ounces, and South Africa’s mines struggled to keep up. Production levels reached their lowest point in two years. Just as the World Platinum Investment Council predicted the rise in demand to come from global economic growth in China, the trade war put a damper on expectations. While the trade war has been a significant sticking point for the nationwide economy and has caused fear in investors around the country, it may just lead to unexpected opportunities that no one could have anticipated.
Reviewing Some Analyses
Investing News expects platinum production to increase by 1 percent while global demand continues to fall by 7 percent year after year. The surplus of 250,000 ounces challenges the market to return to equilibrium even though analysts expect a reduction to only 25,000 ounces. However, in the face of changing conditions and expectations, analysts look for the market to balance in 2018 as the supply and demand pick up the pace. They attribute the reduced need for platinum in 2017 to the automotive industry that required 3 percent less than expected due to falling demand in Western Europe. The market experienced growth in commercial vehicles for China and the rest of the world as well. As a compounding factor, the jewelry sector did not offer the same appeal for platinum as it has previously demonstrated. That means that it may not be the best indicator of the metal’s future relative to its industrial and commercial production applications in nations and factories around the globe.
In 2017, the demand globally slipped by 2 percent as the decline in China challenged other regions to offset the difference. A decrease in Japanese bar buying affected the statistics as well. Even with reductions in many sectors, the exchange-traded fund investments came back strongly after two down years. Investors in the United States increased their holdings by 90,000 ounces, a figure that’s not insignificant considering the global supply of platinum in perspective.
Earning an Unwanted Appellation
Seeking Alpha wonders if platinum may have a good year in 2018 after falling from its once lofty position. In 2008, investors regarded it as the “king of the precious metals sector.” However, its fortunes fell precipitously over the past decade. Silver has accompanied platinum in the lower priced metals sector while gold and palladium have reached “appreciably higher” prices than they had at their peak in 2008.
The severity of the decline in the price of platinum has produced a downward spiral since 2014. The industrial world has turned its back on it and favored palladium instead. Investors tended to reject it after their disappointment in its performance during the financial crisis.
A steep drop of 67 percent in the five months between March and October 2008 created a “carnage in the platinum market” that investors remember distinctly. Analysts at Seeking Alpha note that platinum has experienced a consistent downtrend since 2011 and that it has earned recognition as “the worst performing precious metal since 2014.”
The Motley Fool points out that the largest use of the platinum group of metals rests with the automotive industry and its production of catalytic converters. Several automakers have plans to produce hydrogen-cell vehicles, but a problem may occur with the requirement for “significantly more catalytic material” than diesel or gasoline vehicles use. This means that it’s likely going to be some time before the demand for platinum is gone entirely within the automobile industry as a whole.
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