The title should read "Gold Is...AND ALWAYS WILL BE MONEY!!!" LOL! I've had a fair number of people ask me why there's been such a delay since my last post, so I hope this one is informative and fun. I could bore you with the details why it's been so long, but that's probably not your idea of an enjoyable Sunday afternoon. The Wisconsin Badgers couldn't get past Michigan State, so I don't have as much of an incentive to get this finished before the start of the Big Ten Championship. However, if you are a fan of NCAA basketball or the Big Ten, it should be an exciting game. So grab some popcorn, and tune in to some great basketball and some fun gold and silver updates!
The news for gold and silver ending 2013 was pretty boring, but things have not stayed that way. First, there was the London gold fix manipulation headlines (London Gold-Fix Banks Accused Of Manipulation in U.S. Lawsuit). Second, the 1st quarter increase in gold prices are more than 10% and futures buying seems to indicate more short term increases (Big Gold Futures Buying Is Pushing Gold Higher). Last but not least, world events have put the currency/resource wars directly in the global spotlight (Exhibit A-Russia Warns Could 'Reduce To Zero' Economic Dependency On U.S. and Russia Wants IMF To Move Ahead On Reforms Without U.S., Exhibit B-Russian Troops Seize Gas Plant Beyond Crimean Border). By all intents and purposes, this is another major event in the ongoing shift of control over the global economy. The underlying change that is taking place is a shift out of the U.S. dollar as the world's reserve currency, and global events continually showcase that trend. Unlike any government currency, gold and silver are natural forms of money and can't take political sides. So it doesn't matter what currency is being used or the tyrannical government that is calling the shots, because gold and silver are always objectively valued as long term assets. Governments and banks can attempt to manipulate the prices, but much like land or energy resources, there is an intrinsic value that can't be hidden. I digress.
For a short term investment analysis you can read more about technical charts and trends here, Gold and Euro Soar On Escalating Ukraine Moves. To sum up the moves in the precious metals market recently, gold bottomed late last year near $1200 per ounce and has been moving upward ever since. As you'll read in some of my article references, some of that is due to futures buying and inflows back into gold ETFs (exchange-traded funds). ETFs are changing the way investors play the stock market. You can read the definition here, ETF | Exchange-traded fund. ETFs are a relatively new type of investment, in historical terms, with a relatively new type of gold and silver investor buying the 'digital metal.' In the past, a small percentage of investors made their home in the gold and silver markets by purchasing physical bullion. While gold and silver still only represent a small percentage of the commercial investment arena, the ease of digital investing is changing that. Money that was circulating elsewhere is moving back into gold and silver. There are also examples of large institutional investors changing their tune about gold to start 2014 (see George Soros article here). Average investors typically follow their lead, and usually they are too late to the party. The herd mentality driving the volatility is not unique to any particular investment (see housing bubble 2008). No matter what the reasons, it doesn't stop us from needing certain tangible assets. Unless you feel like settling for a paltry 1-3% guaranteed interest that doesn't keep up with price inflation, every investment involves some form of risk.
As a volatile alternative currency, gold and silver carry risk, and that is why you need someone to help you with it. While there are no guarantees, if you are timing the market right now, any price below $1300 seems like a bargain. If you own ETFs or are considering purchasing them, remember that the biggest difference compared to owning the physical metal is that someone else owns 'your' gold. You are investing in a company's capacity to store their gold, and paying them a fee to do it. That's a lot different than buying and selling with a dealer (preferably me) and storing the gold wherever you want. There is value in purchasing a gold or silver ETF if that is your only option. However, physical metals can be sold back to me at any time (assuming you accept my buy price), and you also get more flexibility of choosing how to sell your metals if you don't want to sell to me. You can sell your gold or silver at local pawn/jewelry stores, on eBay, at local farmers markets and craft shows, or even choose to barter with it. Unlike an ETF, you actually own the physical metals, so you can create a competitive selling market for your assets.
The recent correction in gold and silver during 2013 is much different than 2008. In 2013 the price bottomed at $1200 compared to near $800 in 2008. If you purchased gold and silver any time before 2010 you are probably very pleased with your investment, even after the crazy drop in prices last year. If you bought when prices were near $1800 you'll just have to wait a while longer for your retribution for last year's price manipulation. And if you are smart, buying when prices are low like they are right now, is a lot better idea than waiting until the price of gold eclipses $2000 during the next phase up in this historic bull run.
Keep the Faith and as always, God Bless.
www.argentumusa.com
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