Feb 11 2009
Update on Gold and Silver
On November 23, 2008 , I told you that gold seemed to be gaining its footing and would move higher. I gave you evidence of this and said that it looked like the right time to buy. Today, the price of gold is over nine hundred dollars and moving right along. Silver has done even better.
Why is gold and silver continuing to rise? It’s simple. This commodity is directly related to money supply and value, and anyone who tries to tell you otherwise simply has no idea what s/he is talking about. Gold and silver is so critical to your portfolio that to go without it is simply exposing yourself to the risk of having useless money.
The problem is when to buy. Buying should occur when the metals are at their lowest, but perhaps you didn’t think of that when gold was selling for under $300/ounce. Well, do you buy now or what?
Perhaps, but it might be worth your time instead to stock up on silver, platinum and palladium instead. Silver always streaks upward as gold gets in, but costs considerably less. However, platinum and palladium will recover when car manufacturing picks back up, and believe me, that day will come. At its height, platinum was over $2000/ounce. It’s important to remember that in the past several weeks it has risen well over $200 an ounce.
For parents in the middle of raising children and struggling to pay bills, I understand that there isn’t the money to put into these kinds of investments right now. However, consider this as a harbinger for good investing for those who have a bit of money sitting around. Remember, too, that mutual funds that rely on precious metals are a goody buy right now, and so would be SLV, the ETF for silver. As for gold, it will continue to rise if the debt gets worse, if our fiscal situation looks bad. if people continue to struggle. It will rise with inflation, and that is a good reason to have it in your portfolio.
Also, buy the actual metal, not certificates. I’ve been hearing about a shortage of the actual metal for a while now. The hubbub seems to have died down, but I must say that having finally figured out that I can walk in to a particular store front down the street from me, hand them pretty printed paper and get real money (one Troy ounce silver ingots) in return, the concept of giving paper for paper kind of makes me wrinkle my nose.
I bought my first ounce of silver several months ago when it was about $16/oz (oops!) and I’ve had a goal of picking up another ounce every time we have an influx of cash (pay check, et al). I’ve a friend who is not yet 30 who has a tidy stash of gold coins that she’s been working on since her first job in high school. OH! how I wish my parents had taught me anything about precious metals instead of bank savings accounts!!
Yes, absolutely. Always own the metal. I try to give good buy signals as i can for gold and silver. Right now, platinum is a good grab as is palladium. Both are at a low, though platinum is slowly crawling up there. You should always hold the metals if you can.
The metals market will climb for a while yet, and then about the time that everyone is talking about it, we the price will erode for another length of time. By my calculations, we should see metals go ballistic about three times in the life of the average person, maybe only two. This is my second time, and if I live to be over ninety, I should see it again. In between, I will do for my children as I can… buy them metals and give it to them as a gift when I get old. But only when it is at a low.