Buying Opportunity

10 Nov

Buying Opportunity

We talk a lot about buying gold for safety.   To protect your wealth, with governments out of control, running huge deficits and printing money like crazy, we recommend people move to safety with gold, the world’s most enduring form of money.

After all, the world has been through governments and episodes like this countless times.  We know from experience that gold always come out on top.

But people buy gold for a lot of different reasons.  

Many of our clients buy gold and silver for good old-fashioned profit!  

They have had a great year!  And we think next year will be even better!

Now we’ve had a pullback in both gold and silver prices, one we welcome.  Since we are in a primary bull market that promises much higher prices ahead, we look at any correction or pullback as a gift, a buying opportunity.

But first, let’s look at how both gold and silver have done over the last 12 months.  

Gold finished on Friday (11/8) at $1463.  A year ago, it was $1200.  Over the last 12 months gold has gained almost 22 percent.

Silver finished Friday at $16.82.  A year ago, it was 14.25.  That’s an 18 percent gain.  

For comparison, the DJIA closed Friday at 27,681.  That’s a 5.7 percent gain for the past 12 months.  The S&P 500 has done a little better, up about 10 percent.  But note that neither have shown the appreciation over the past year of gold and silver, and both stock market indices are at all-time highs.

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We think it makes much more sense to invest in gold and silver, both in new bull markets and both well below their earlier highs, than to buy stocks at the top of a long and exhausted expansion.

The price of gold is well below its high of $1900 set eight years ago; it will have to climb an additional 30 percent just to reach its prior high.  

Silver will have to almost triple before it reaches its prior high of $50.  

Gold has retraced almost exactly one-third of the powerful summertime breakout that took it to $1566 in September.  That would be a rather typical correction and creates an attractive entry level for buyers.

There are a lot of reasons that people buy gold, not the least of which is for profits.  The fundamental of debt, deficits, international de-dollarizaition, and renewed and aggressive “money printing” remain the background upon which gold will chart far higher prices.  But for those positioning for profit opportunities in 2020, now less than eight weeks away, we recommend taking advantage of this pullback in gold and silver prices.

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