Gold is still hovering below the $1,200 mark and silver had a bit of a bump this past month. The question in my mind is what will get gold and silver to keep moving higher for the beginning of the summer months. The only answer that has been somewhat consistent would depend on what the dollar does and that is why I have been emphasizing it of late in my Current Thoughts. Does this mean that things can stay that way?
Things can always change from a micro level depending on news, economic data, world conflicts or what have you. If you are a holder of physical metals you really don’t care about the news of the day. You hold the metals through thick and thin and may or may not sell in the future when the price of gold and silver are much higher. Gold to holders of the physical metal know that it is insurance first, and yes, at some point they may sell and buy something like beaten down real estate or stocks. But it is the peace of mind that comes with owning gold that matters most. It is wealth they know they control no matter what bank or government screw ups occur. And yes, they always occur. It’s just a matter of time.
Part of me wants to go long gold here and part of me says we break to lower lows. How do I pick a side? I don’t. I let the dollar lead the way and see if gold follows with it and go long if the dollar falls and hold off on buying if the dollar is moving higher. As many know, I have been holding off for some time. But that doesn’t mean I don’t “trade” long the metals and miners at times (among other ETFs). But understand, investing in gold is a different mentality.
In fact, it is most people over the age of 50 who buy gold. Perhaps they are more conservative or perhaps they have been reminded by years from older representatives of what money once was. Money once was gold. Money once was backed by gold. Money today, if you are referring to “legal tender” still is gold as the American Gold Eagles are indeed legal tender.
But I am going to share you how smart our government is. They created the American Eagle coins in 1986. They put a $50 face amount on the 1 ounce coin. They put a $25 face amount on the 1/2 ounce coin. They put a $5 face amount on the 1/10 ounce coin, all proportional. But what face amount did they put on the 1/4 ounce coin? It should be $12.50 right? But our government in their infinite wisdom put a $10 face amount on the 1/4 ounce gold coin.
Not only does our government put ludicrous face amounts of $50 on a $1,200 coin, but they can’t even get the division right in pricing the fractional coins. God Bless America! At least it’s citizens; not the incompetent government that is stealing away your future generations wealth.
Doug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534
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