“Like a roller coaster..” is the perfect simile to describe the recent events in precious metal markets. As in actual roller coasters, everyone on board looks to the big drop-off with either terror or anticipation (…reaction to this metaphorical drop depends on your level of experience in precious metal investing).
Recent events in gold and silver markets can be almost exclusively compared to a roller coaster ride.
Like the beginning climb on a roller coaster, these metals seemed to be destined for the heavens just two weeks ago. As we said in our prior market update post, the month of April saw gold and silver break new records day after day.
Gold broke and well exceeded the $1500/oz barrier and silver touched $50 for a moment.
Then we hit the peak of the climb and started falling at seemingly lightning speed.
Just in the last week, silver took a 27% hit and gold dropped sharply as well, but not as much as silver in percentage terms.
All in all, silver gave back $12.27 in the last week to close at $35.61 per ounce on Friday…gold gave back $68 to close at $1495 per ounce.
I understand what happened, I was there. But why would someone actually look forward to a drop like this?
Since we in the business have spent many years tracking gold, silver and other commodity oriented markets, we understand that there will be times where it seems like the world is coming to an end.
This last week was one of those times and while seeing red on our ticker screens isn’t the most satisfying feeling in the world, it does provide some comfort.
Considering gold (…and especially silver) were on the rise for so long, we knew it was only a matter of time before the pendulum swung back the other way for a short time. If it kept going in the up direction for too long, gold and silver could in fact be considered in ‘a bubble.’
Personally, I think it’s safe to say there was some irrational exuberance going on recently. It’s not that we don’t think silver is worth $50/oz and gold $1500/oz, it’s just that we didn’t expect it to go that far, that fast.
Regardless though, this big drop-off does present great buying opportunities. If you were holding out during the big push beyond $40 (…$1500 for gold), you certainly were wise to wait to make your purchase.
That’s why some look to these times with anticipation – it presents a wonderful opportunity to acquire more bullion for the same amount investment.
But now that we’ve come back to Earth for now, we can look forward to a renewed push higher (…we think)
We’re comfortable saying this since none of the fundamentals of why gold and silver are good investments has changed. The U.S. and other western nations still have mountains of debt to deal with…central banks around the world are continuing to inject ‘money’ into the economy. And while the central banks are signaling interest rate increases down the road, they remain at historic lows.
(Announcements by central banks this week regarding the potential for increasing interest rates is perhaps one reason for this past week’s sudden sell off in gold, silver and commodities).
We could probably speculate all day long as to the precise reasons for the market’s timing.
Regardless though, we do think this is a great buying opportunity. Silver bottomed around $34 and closed around $35.61 on Friday…gold bottomed around $1460 but closed at around $1495 on Friday.
Could this be the signal the correction is done for now?
Keep in mind this may be the cheapest you will ever see it. All of the fundamentals point to gold and silver going up over time. But as with anything, circumstances can change and put these kinds of investments on the defensive.
(…although this can happen, we’re comfortable predicting it won’t in the near term)
If you’ve been looking for an opportunity to increase your holdings and get more bang for your buck, now is the time to consider jumping in. To see our gold and silver bullion inventory and to place an order, visit our main page today for current prices and stock.
Lock in your prices today and maximize the quantity of bullion you can acquire by catching it during the bottom of these sell-offs…you’ll be glad you did and when the next one occurs, you will be able to look forward to it with anticipation rather than terror.
I can not see the point of the comex dipping into the trading in the manner that they have, its an artificial means of control on the market. Some what disappointed in the manner it happened but they say its for our own good, and I can almost see that. However, I am strongly believing the fundamentals are there for buying. I have one question, futures in silver are hanging around the $35 range at the moment out to the end of the year. Not seeing much until then I think?
Please accept our apology for the tardy response!
We agree with you, Comex claims to be implementing the changes to ensure that future contract holders are properly capitalized. Although it is a bit odd the way the changes where applied. Why not make one drastic change. Multiple changes on consecutive trading days suggest the attempt to create fear, and force selling. As you said, the fundamentals appear to be decent for buyers. This summer we may not see the growth we’re used to, but we are optimistic about long term silver numbers.
I’m investing in ETFs in Swiss Francs (chf). It sounds fancy, but it’s my own currency and unlike euro, usd, and pounds it only has little inflation. i do have some euro and pounds but sell when i can. take it easy and protect your saving by buying on the dips. If not gold, silver, and oil are definitely safe in the long term.
I bought too much silver from provident between $40 and $50 per once, Right now, I am loosing money on all the silver that I bought.
All I can do is price average down by buying more at 35.00 an once but I will still end up owning it all at $46.00 an once before I can even begin to break even on this mess. The coins look great but I paid too much 4 them.
I can only hope that silver goes to 50.00 an once later this year or next year.
Temporarly quite disgusted .