Mid Week Market Update 2017-11-16
Gold Range Bound
Gold has been range bound for an extended period of time after this summer’s rally. Gold has essentially been trapped in a range for the last two months, with the range over the last four weeks having been only 3.3%. Gold prices are still on track for their best year since 2010, all while the last four weeks have seen the lowest price volatility since 2010.
Why is this important for precious metals investors? Gold’s stability in the face of a US dollar rally this fall, as well as its relative value when compared to assets like stocks and bonds bodes well for gold’s performance when sentiment turns positive. Today’s prices likely make for an attractive entry point for long term investors.
Bitcoin’s Wild Volatility
In sharp contrast with gold’s relative calm, bitcoin has been experiencing wild price gyrations. This past weekend saw bitcoin crash by 30%, then just as quickly rally by 30% to take back a large portion of the initial move down. While we feel that blockchain technology has a large role to play in the monetary system in the future, this kind of volatility has to challenge even the most experienced speculator.
Why is this important for precious metals investors? We were one of the pioneers in accepting bitcoin payments. For bitcoin holders, this kind of volatility may be an excellent time to take some bitcoin off the table and invest the proceeds into gold and silver.
Watch What They Do…
Large, leveraged speculators taking a bullish position are a necessary ingredient for any asset class to begin to increase in price. Ray Dalio’s Bridgewater fund, considered to be the world’s largest hedge fund, added a large position in the gold ETF, GLD in 2Q2017. As Dalio said in August: “We can also say that if the above things go badly, it would seem that gold (more than other safe haven assets like the dollar, yen and treasuries) would benefit, so if you don't have 5-10% of your assets in gold as a hedge, we'd suggest you relook at this. Don't let traditional biases, rather than an excellent analysis, stand in the way of you doing this.”
Why is this important for precious metals investors? When an investing legend of the caliber of Ray Dalio puts his money where his mouth is, it makes sense for the rest of us to listen carefully and then examine our own allocation to precious metals.
We have an unusual opportunity currently available thanks to wholesale market conditions whereby we can offer our lowest premiums ever on silver and gold being sent into storage in Brinks Calgary. Minimum order size of 500 ounces of silver or 10 ounces of gold to receive this deal, and the metal must be placed into storage. Please call our sales team for more details.
Why is this important for precious metals investors? A fully allocated, fully segregated storage program is the only fully insured way to hold your precious metals investments. We always believe in first and foremost in holding precious metals in your hands, but beyond a certain level you are best using a storage facility to protect your investment.