Home About Archives RSS Feed

Independent Investor: Precious Metals New Bull Trend

Bill Schmick

The recent price action in precious metals this past week convinces me that a new bull run in gold and silver is underway. For those investors who have yet to add some exposure to precious metals, now would be a good time.

That's not to say that these commodities will have a straight run higher from here. That would be too much to ask. There will be continual pullbacks in gold and silver. These corrections are usually sharp, fast and excruciatingly painful for those who are risk adverse. So if you don't have the stomach for volatility and turbulence, precious metals is not your cup of tea.

Back in May, gold and silver both hit my interim price targets of $1,250 an ounce of gold and $19.50 an ounce in silver. I then warned investors that there would be a period of consolidation.

"Wait for the pullback," I advised, "and then add or initiate new positions, but be prepared to wait. These commodities can back and fill for several months before resuming their move higher."

Fortunately, that scenario turned out to be accurate. I have been waiting patiently for both metals to decisively break above my interim price levels. I believe they did this week with gold reaching $1,275 an ounce and silver hitting $20.75 an ounce.

"So where do you see precious metals going?" asked one investor from Becket, who has a substantial holding in gold.

I believe gold can easily reach $1,350 an ounce before suffering another bout of consolidation. It could go higher, and I believe it will, but the timeframe depends upon a lot of variables that have no clear outcomes right now. In the case of silver, $30 to $36 an ounce is my ballpark estimate. Obviously silver has a substantially higher percentage gain ahead.

You would have to go way back to early 1980 to match the price of silver today. For those who were around back in the day, silver was in a huge run caused by two brothers, Nelson and William Hunt, along with a consortium of partners. At its peak, this silver pool owned more than 200 million ounces of silver. Its purpose was to buy silver as a hedge against inflation since at that time private citizens were prohibited from owning gold. The Hunt brothers cornered the market. The COMEX changed the rules and the Federal Reserve intervened in the market as well. The silver price collapsed and languished for well over two decades.

For many, precious metals offer a "safe haven" given the shaky state of the global economic recovery. At the same time, nearly every central bank in the world wants to prevent their currencies from gaining strength in order to facilitate increased exports. In addition, most governments have opted for an expansionary monetary policy in order to prevent deflation and kick start their economies.

I suspect that gold moved this week on a bet by speculators that the Federal Reserve will shortly stimulate the economy through additional quantitative easing. Investors are also betting that industrial demand for silver, as well as palladium and platinum, (which are also reaching new highs), will continue to increase in the future.

Investing in precious metals is risky, at best, but it's been the only game in town for investors lately. George Soros, the famed billionaire investor, recently warned that gold was the "ultimate bubble" and that "this is a period of great uncertainty so nothing is safe." I agree with that opinion. However when nothing is safe, a little gold is still better than no gold at all.

Tags: metals      
Page 3 of 3 1  2  3  

Support Local News

We show up at hurricanes, budget meetings, high school games, accidents, fires and community events. We show up at celebrations and tragedies and everything in between. We show up so our readers can learn about pivotal events that affect their communities and their lives.

How important is local news to you? You can support independent, unbiased journalism and help iBerkshires grow for as a little as the cost of a cup of coffee a week.

News Headlines
North Adams Airport Commission Finalizes Restaurant RFP
Pittsfield School Committee Concerned With Teacher Retention
Williams Women's Tennis Wraps Up Fall Campaign
Berkshire County Kids' Place Gala Celebrates Courage
Maimaron, Williams Football Cruise Past Bates
MCLA Women's Cross Country Competes at Western New England
Noted 'Edu-Tainer' Brings Message of Tolerance to Mount Greylock Educators
Wahconah Unveils Banner Marking National Unified Sports Honor
Northern Berkshire Coalition Forum Envisions 'Inclusive Development'
Controversial Williamstown Sporting Goods Store Proposal Withdrawn

Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of BMM. None of his commentary is or should be considered investment advice. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com Visit www.afewdollarsmore.com for more of Bill’s insights.

 

 

 



Categories:
@theMarket (305)
Independent Investor (416)
Archives:
October 2019 (6)
October 2018 (2)
September 2019 (7)
August 2019 (5)
July 2019 (5)
June 2019 (8)
May 2019 (10)
April 2019 (7)
March 2019 (7)
February 2019 (6)
January 2019 (6)
December 2018 (4)
November 2018 (9)
Tags:
Retirement Europe Deficit Currency Recession Debt Pullback Election Economy Commodities Greece Housing Energy Oil Taxes Banks Federal Reserve Crisis Stock Market Stimulus Rally Euro Congress Wall Street Interest Rates Debt Ceiling Selloff Europe Japan Bailout Jobs Stocks Markets Fiscal Cliff Metals
Popular Entries:
The Independent Investor: Don't Fight the Fed
@theMarket: QE II Supports the Markets
The Independent Investor: Understanding the Foreclosure Scandal
The Independent Investor: Does Cash Mean Currencies?
@theMarket: Markets Are Going Higher
The Independent Investor: General Motors — Back to the Future
@theMarket: Economy Sputters, Stocks Stutter
The Independent Investor: How Will Wall Street II Play on Main Street?
The Independent Investor: Why Are Interest Rates Rising?
The Independent Investor: Will the Municipal Bond Massacre Continue?
Recent Entries:
@theMarket: Markets Await a Brexit Vote
The Independent Investor: Was There Really a Trade Deal?
@theMarket: Stocks Soar on 'Skinny' Deal
The Independent Investor: Brokerage Business Not What It Used to Be
@theMarket: An October to Remember
The Independent Investor: Markets Bogged Down by Politics
@theMarkets: Markets Muddle Through
The Independent Investor: India's Bid for More Trade
The Independent Investor: The Era of U.S. Oil Independence
@theMarket: Investors Discover Value Stocks