With crypto currency increasing in volatility, rising interest rates and inflation creeping in, investors are flocking to natural resources to help provide a financial anchor during these turbulent times.
However, the big question remains: what is the best natural resource to invest in?
In this blog post, we break down our top six resources that you should keep an eye on in 2022.
Nickel
Nickel is a metal used in the production of stainless steel and other alloys. A large percentage of nickel produced each year is used to create these alloys, with the remaining portion going towards the production of batteries, coins, and other applications.
Nickel has recently emerged as a promising investment due to the increased demand from the electric vehicle market, which has seen a surge in popularity. Furthermore, the electric vehicle market is only growing due to the move to a greener economy, meaning that nickel demand will correspondingly increase.
According to The Assay, the future of nickel is forecasted to have a 7% compound annual growth rate between 2020 and 2025. This communicates that investors can expect steady promising returns over the coming years as nickel is tracking on a growth path.
If you’re looking to invest in nickel, try researching nickel mining companies that are publicly listed or nickel futures.
Copper
Copper is a metal used in various applications, including electrical wiring, plumbing, and the production of alloys. Copper is an essential component in producing electric vehicles, as it is used in the production of batteries.
Like nickel, copper has also been enjoying the recent success of the electric vehicle industry, consequently driving demand. Furthermore, the global pandemic has increased investment in infrastructure projects as governments look to stimulate their economies. This increased investment is also driving up demand for copper.
Furthermore, supply is set to meet demand, with the copper alliance reporting over 5 million tonnes of copper reserves. As a result, this signals that prices are set to remain steady and safe over a longer period of time.
For information on copper, check out our comprehensive guide here!
Iron Ore
Iron ore is a mineral that is used in the production of steel. The global steel industry has seen strong growth due to the construction boom in Asia, which has driven up steel demand.
The Australian government’s Department of Industry, Innovation and Science forecasts that iron ore demand will remain strong in the coming years due to continued investment in infrastructure and construction in Asia. They predict that iron ore prices will rise to $US85 per tonne by 2025.
Palladium
Palladium is a metal that is used in the production of catalytic converters. The automotive industry is the largest market for palladium, as it is used to produce cars and trucks.
Palladium has seen strong growth in recent years due to the rise in sales of electric vehicles, which require more palladium than traditional gasoline-powered vehicles. Furthermore, stricter emissions regulations have also been driving up demand for palladium.
Silver
Silver is a metal that has a variety of uses, including in the production of electrical components, solar panels, and water filtration systems. Silver is also used as an investment commodity.
As stated before, with governments increasingly shifting towards a greener economy that is driven by sustainable energy, silver has significant growth potential. In fact, solar energy alone is projected to account for 45% of America’s total electricity supply by 2050.
Furthermore, investors tend to purchase silver during periods of economic uncertainty, as it is seen as a safe-haven asset. The global pandemic has seen increased investment in silver as investors look to protect their portfolios.
Uranium
Uranium is a metal that is used in the production of nuclear power. Nuclear power is a clean and efficient source of energy that emits no greenhouse gasses, offering a great opportunity for those ethical investors.
The International Energy Agency projects that global investment in nuclear power will need to triple by 2030 to meet the world’s climate goals. This increased investment will drive up demand for uranium. Ultimately, this makes uranium a great resource to watch for investment in the coming years.
Final Thoughts
Nickel, copper, iron ore, palladium, silver and uranium are all great investment opportunities in the coming years. With the world increasingly shifting towards a greener economy that is driven by sustainable energy, these resources offer significant growth potential. So be sure to do your own research and consult with a financial advisor to make the best investment decisions.
