We’re one month into 2017, and the world has seemingly lost its mind.
Political strife, environmental concerns, talks of rate increases, and an enormous amount of other spot price influencers are having a big impact on economists predictions for the year.
Talk of tariffs on Mexican imports have circulated, leaving some wondering if Libertads will be affected. As a large supplier of silver, how will proposed legislation affect prices from Mexican mines?
As many as three interest rate hikes are speculated to occur this year. How will gold fare amidst rising rates?
Industrial demand for platinum and palladium is increasing. The automobile industry is booming and utilizes a significant amount of these precious metals in manufacturing. Could this elevate platinum and palladium prices?
My question is, how are you stacking in light of these events? Do you have a game plan for the year in regards to investing? Where do you see the market heading this year, and how do you handle the uncertain market?
Each of Provident’s precious metals has the potential for a wild 2017 with the new landscape of the American government taking place. How can an investor observe the chaos without joining in?
Let me know your thoughts about investing in 2017.
Happy Stacking!
-J
Eric says
-J
My plan for this year is to continue to invest at the same pace as last year.
I also think that silver has more upside potential than gold, so I intend to be overweight silver in the coming year.
I think that platinum will perform better than gold, so I intend to add additional platinum to my portfolio.
Palladium has had the best run of precious metals in 2016, but it also fell the most in 2011. I think it was GM that lost $1B on palladium futures contracts at the time. Although I’m not risk averse, I just don’t know enough about palladium to be a serious investor. -J maybe you and the nice folks a Provident can help educate us about palladium this next year.
I moved my entire 401k to cash the Friday before the inauguration. I intend on sitting out the first 100 days of Mr. Trumps presidency. I’ve only done this once before and it was a mistake as the markets continued to climb at the time. I think the capital markets have come too far to fast since the election and I anticipate a 5-10% pull back in that time. I also think the Mr. Trump is one tweet away from sending the markets into a tail spin.
As far as your reference to the signed and proposed executive orders, I think it’s still mostly talk. I think that Mr. Trump is going to get a lesson in government and yes, federal judges can put a stop to executive orders. Our constitution has too many checks and balances… and it’s by design. I think he’s going to learn that our government is not a business and can’t be run like one.
After these first 100 days, I’m confident that the shock effect of an active new president will wear off and the hard work of tax reform and infrastructure spending will drive the economy forward.
If pro is to con, is congress the opposite progress (old joke)? If Mr. Trump to get some movement out of those folks, then I think the next four years are very promising.
I do have concerns about the $20T national debt and why that’s not getting much attention. I did the math: 20,000,000,000,000 (yes, that’s 20 followed by 12 zeros) divided by 322,000,000 (roughly the US population according to the US Censes in 2016) equals $62,111.80 per every man, woman, and child in the US. I find this equation disturbing.
I hope all is well.
R/ Eric
ProvidentMetals.com says
Excellent contribution, Eric! I appreciate your thoughts. I would agree with your perspective; I am certainly glad for the checks and balances system, and I hope President Trump can resist tweeting too much. Also, I wrote a note to myself to write some articles on palladium, per your suggestion.
Have a wonderful week!
-J
J.H. says
I have my own baselines concerning gold and silver. Gold, while still a good value is trading on the higher side of my historical baseline, silver on the other hand is trading lower on my baseline. So silver is the better value, says I. Again, these baselines are my own and unscientific but they work for me.
The question is how are we stacking in light of current events? The answer for me is the same as always; that is any discretionary funds are invested in metals at this time. The precarious nature of information, geopolitics and the jenga construct of unprecedented global debt should deliver a sobering message about life in 2017-2018.
Place your bets as wisely as you can. Hope for the best , prepare for the worst.
ProvidentMetals.com says
I played jenga last week, and if they are an illustration of our country….yikes. :/
-J
Michael Lebinowitz says
Platinum, palladium and the other rarer metal hold no interest for me so I don’t play those at all. As far as anyone who is playing them, I hope they make a killing, someone has to, right?
As far as tariffs go I think should we see them they are more likely to be product or product type specific. Like moving a plant from Detroit to Mexico, that’s a voluntary decision. It’s not like you can move a silver mine from Detroit to Mexico and harvest that Michigan silver from there. Besides, IMO, American mines can sell all they are harvesting even with Mexican silver coming across the border. So it’s not like it’s an industry that has beaten up too bad because of foreign competition unlike most of manufacturing.
My game plan for this year will look a lot like last year’s, until it changes. 🙂 When spot was up I found premiums on sovereign silver to be such a small amount more that I was buying a lot of ASEs, Maples, Brits etc. When you are looking at a beater generic and that’s going to cost you $20something, I mean for just a couple more bucks, you can buy the high test brand. It’s kind of a no brainer. Likewise, when spot is under $20, the premium for the good stuff is such a higher percentage of the total purchase price, I tend to just buy lower premium generic weight then. A great example is on the right side of this page with the Incuse Indian at $18.25 where an ASE is going to set you back $21 and change.
As far as the year ahead, I expect we are going to see a lot of volatility. I think silver has the potential of doing better than gold, if you compare even dollars invested in each. Silver could run 20% higher where I think gold would be real challenged to get anywhere close to that.