AI Boom Could Boost Demand for Gold and Silver

artificial intelligence

If there was one hot topic that could define 2023, artificial intelligence (AI) would probably be it. Since it has burst into the mainstream, AI has become a favorite issue to discuss, as both its supporters and detractors make a great deal about it.

The thought of AI revolutionizing the way we live our lives, just as the internet started to revolutionize our way of life 25 years ago, has led to increased speculation about the importance of AI to the future.

But while AI may end up changing the makeup of various industries and making certain jobs obsolete, as the AI boom progresses, it’s going to take a lot of computing power to keep that boom going. And that in turn could end up boosting demand for precious metals.

What Is AI?

Artificial intelligence is the attempt to simulate human intelligence through the use of machines, and in particular through computers. Every one of us has probably already experienced some sort of AI, such as Apple’s Siri or Amazon’s Alexa.

Those types of AI are programmed to complete very narrow tasks, and if you’ve ever had to interact with them, you’ve probably been left frustrated at just how limited they are. But with new types of AI being developed, the breadth and depth of what they can accomplish is growing.

Some AI programs can produce amazing results, and to AI’s supporters, we’ve only just started scratching the surface of what AI can do. But all of this fancy AI requires the use of computers.

The more data that goes into training AI programs, the more computing power is needed. And that requires more and more powerful computers.

Precious Metals and Electronics

We may take for granted the use of electronics in our daily lives. Smartphones, laptops, computers, and even smart home devices have all become commonplace. But none of those electronics could function without precious metals like gold, silver, platinum, and palladium.

All of these precious metals play a role in the production of computer chips, circuit boards, capacitors, and other electronic components that make our electronic devices function. As demand for these devices increases, demand for precious metals could increase as well.

Growth in Precious Metals Demand

Most silver demand normally comes from industrial demand, unlike gold, where demand largely comes from investment and jewelry. Of total silver industrial demand, roughly two-thirds comes from electronics, making up nearly one-third of total silver demand.

Total silver demand from electronics has increased about 9% over the past two years, and is over 40% higher than it was back in 2014. Demand from solar panel producers is driving a lot of that increase in demand, but there are numerous other uses for silver in electronics production, including in AI.

By contrast, gold use in technology, while still important, isn’t nearly as important to overall gold demand. Total gold demand in technology is down about 3% year on year, and only accounts for about 6-7% of overall gold demand.

While gold demand from the technology sector may have remained relatively stable over time, that’s not to say that it can’t or won’t increase as a a result of the AI boom. After all, the greater use of electronics, the more demand there is for the metals that produce them. And with AI potentially being a new ground-breaking technology that could upend the way we do things, demand for electronics that use gold could grow significantly.

How the AI Boom Can Benefits Precious Metals Owners

Now you might be asking yourself how all of this affects you. If you don’t already own silver, gold, palladium, or platinum, chances are that you won’t notice the impacts.

But if you do own precious metals, increased demand for these metals in the future could end up boosting their prices.

The gold price today is being impacted significantly by increased investor demand for gold. Demand for silver is primarily industrial, although silver prices could see a significant increase if investor demand for silver picks up during a recession.

Platinum and palladium are both primarily used in the automotive sector, in the production of catalytic converters. Due to increasing demand for electric vehicles, demand for these metals from the automotive industry could fall, although current demand figures aren’t indicating that.

All of these metals play a role in the production of electronics, however, and if the AI boom ends up growing as large as AI’s proponents think it could, all of these precious metals could see a boost in demand which could be reflected in higher prices for gold, silver, platinum, and palladium.

Many people today are buying precious metals like gold and silver in the expectation that gold and silver prices will increase in the future. During the aftermath of the 2008 recession, for instance, gold prices nearly tripled and silver prices nearly quintupled from their 2008 lows.

With recession seemingly on the horizon, fear is gripping many people, and they’re looking for ways to protect themselves. Many people lost big in 2008, watching their savings and investments wither away while gold and silver took off.

It’s no wonder then that gold and silver are so popular today. And if gold and silver prices get a boost not just from investment demand but from increased demand for electronics from the AI boom, so much the better for precious metals owners.

If you want to take advantage of possible future price growth, there are numerous ways that you can purchase precious metals. You can always make direct cash purchases of precious metals coins or bars, which you can then store at home, in a safe deposit box, or for large enough sums at a bullion depository.

For those with assets in tax-advantaged accounts that they want to protect, like a 401(k), 403(b), TSP, IRA, or similar account, there are also precious metals IRAs such as a gold IRA or silver IRA. These precious metals IRAs allow you to roll over assets from your existing accounts tax-free into a new IRA that can then use those funds to purchase physical gold and silver coins or bars.

Goldco has years of experience working with customers to perform these IRA rollovers. With over $2 billion in precious metals placements and over 5,000 5-star reviews, Goldco has become a trusted name in the precious metals industry.

If you think precious metals like gold, silver, platinum, and palladium are something you’re interested in to protect your wealth and potentially gain value in the future, now’s the time to start learning more about precious metals. Call Goldco today to find out how precious metals can help you fortify your financial future.

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