Precious Metals IQ Quiz
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#1Our U.S. national debt is closest to what number?
The answer is:
$20 trillion
Many economists predict higher inflation due to years of government overspending and quantitative easing. Gold has historically been a strong hedge against inflation because it’s considered to be a hard asset; one that is globally traded and recognized as a store of value.
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#2What is the chemical symbol for gold?
The answer is:
Au
Gold is derived from the Latin word “aurum” which means shining dawn.
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#3Which country had the highest global gold production in 2015?
The answer is:
China
They produced 460 metric tonnes. Did you know that the Chinese Yuan just joined the International Monetary Fund’s basket of reserve currencies in October 2016? For years, the government has diligently worked to have its currency be globally recognized. Chinese accumulation of gold gives investors more confidence in holding the Yuan.
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#4Which metal has the highest conductivity?
The answer is:
Silver
One of the largest and rapidly-growing categories of precious metals demand is industrial uses. Gold and silver have long been used in cameras, medical supplies, silverware, communications switches, etc.; but did you know that silver is used in almost all newer digital technologies? This includes cellphones, TVs, and all kinds of computers–ranging from desktops to iWatches. Finally, silver is a key ingredient in the solar industry, since it has the highest thermal conductivity of any known substance.
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#5If you invested $100,000 in January of 2000, which of the following scenarios would have grown the most as of June 2016?
The answer is:
80% Dow & 20% Gold
Since 2000, a retirement account diversified with gold has outperformed the Dow by almost 40%.
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Blends since 2000$156,000 Dow Jones$216,115 80% Dow / 20% Gold$192,000 80% Dow / 20% Silver$204,000 80% Dow / 10% Gold / 10% Silver -
#6In 1980, the United States experienced high inflation soaring to 13.5% from the global economic recession and energy crisis. The price of gold peaked at $850 an ounce. If you adjust for inflation, how high would gold have to rise to today to equal this 1980 high?
The answer is:
$2,482
With inflation, your purchasing power diminishes. Did you know that in 1933 a $20 gold piece or 20 silver dollars would buy you a fine suit, maybe even two. Unlike paper money, that loses value through inflation, gold and silver preserve wealth. Also unlike paper assets, gold and silver can never be worth zero.
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#7Which of the following represents the largest gold demand source?
The answer is:
Jewelry
The same qualities that have historically made gold, silver and platinum a medium of trade also make them popular mediums for the jeweler. In some cultures such as Chinese and Indian, currency and jewelry are close to interchangeable. Universally, there is strong appeal in wealth that is both wearable and decorative. Not only can the wearer enjoy displaying the beauty of their gold and silver, but keeping valuable items close in times of need is a major benefit.
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#8According to the OMFIF (Official Monetary & Financial Institutions Forum), Central Banks around the world are:
The answer is:
Net buyers of gold
“Long-run changes in Central Banks’ policies on buying and selling gold fall into seven distinct periods or ages over the past two centuries – the Seven Ages of Gold – each lasting an average of around 30 years… In Period VII, Central Banks have been net buyers of gold every year since 2008, adding more than 2,800 tonnes or 9.4% to reserves.” OMFIF Special Report
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#9What is the closest current Gold to Silver ratio? Approximately how many times more valuable is gold, when compared to silver?
The answer is:
Gold is 75 times more valuable than silver
This is called the “gold-silver ratio” which is calculated by determining how many ounces of silver it takes to purchase one ounce of gold.
Why is this ratio important to some investors? Many precious metal enthusiasts keep an eye on the gold-silver ratio because when the number is extended above or below the average, it’s potentially an opportunity to purchase or sell, based on historical data with the assumption that prices will move back to their mean. Currently, silver is the metal that has the most upside based on historical data.
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#10Banks and billionaires are making projections for the price of gold. Where do you think gold will be 12 months from now?
The answer is:
There’s no right or wrong answer!
Banks such as JPMorgan, Bank of America and Goldman Sachs are all bullish on gold in the near term. And, billionaires like George Soros, Ray Dalio and Carl Ichan are also precious metals investors. According to Metals Focus, an independent research firm, the 2020 target for gold is $1,540 and for silver is $23.50.
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