What’s Going On With Gold and Silver?

When I woke up Monday afternoon (I work nights) I made my usual rounds on the internet, which includes Yahoo finance.  I saw an article about gold taking a beating and clicked on it and couldn’t believe what I what I read – $23 silver and gold in the $1300’s.   I never thought I’d see those prices again.    I did buy a bit of both metals last week when the prices started to decline, should’ve waited a little bit.    I went to Kitco to see the day’s chart and saw that there was already a pop-up ad asking basically asking if I just lost my ass on gold – I’m not sure what they were selling, but I was impressed with their speed, whatever it was.   I also saw a few articles talking about how the party was over with gold.     It’s kind of a bizarre feeling to wake up with the exact same things you had the day before and then to have it suddenly be worth a lot less.  :::shrugs:::

Either way, I’m really not too worried about this.   I’m looking at this as a great opportunity to acquire more.   I’ll admit I’m a little dismayed with the mining/streaming stocks that I have and starting to get antsy about the silver ETF’s that I bought last fall.      I still believe in the fundamentals of both metals.

I listened in on a conference call/webinar thing tonight talking about the precious metals market and from what I’m hearing is that many dealers of physical metals are seeing a lot more people buying and virtually no one looking to sell back their metals.  If the market was really melting down, people would be falling all over themselves to get out.     Also with most dealers Silver Eagles are about four weeks behind on orders and Silver Maples about two weeks behind.   Right now the premiums over spot are a little higher than usual, which reflects the high demand for physical metals.    Again, if the market was really falling apart, dealers would be trying to get rid of them too.    I’ve also heard reports of coin shops refusing to sell bullion now at anywhere near spot, thinking that they’ll be able to get a lot more in a short period of time.  Makes sense.    I also noticed that one small online bullion dealer conveniently picked Monday to update their server, even after just announcing that they were able to fill orders again.

Also from what I understand, virtually no physical gold (or silver) moved in this – it was all shuffled around on paper and the gold remains sitting in a London warehouse, where it’s been for quite some time.

There’s some real reasons out there for the precious metals prices to go down a little bit.   The Indian government was talking about placing a tax on gold (India is the largest consumer of gold), the US Dollar is doing good right now, the markets are inching up and unemployment is down,  Chinese growth is a little slower than expected and there’s a possibility that Cyprus will have to sell off her gold in order to pay off part of the debt.   Sure that will put some more gold on the market, but the big thing there is that if that’s the deal that they strike with Cyprus, it will probably be the deal they’ll strike with Greece, Italy, Spain and Portugal too when their day comes.

So I think instead of fretting over this I’m going to take this wonderful opportunity to build my position on precious metals at a price I believe to be a bargain.    Maybe this is a good time to splurge a little bit on the boutique rounds instead of the government issued ones or the low-price wooden nickel ones.   I was looking at some Andrew Jackson ones earlier today…



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