Gold threatened to end the week on a sour note by taking a big tumble in early trading on Friday.
After trading even to slightly up, gold abruptly sank $4.11 to $1,721.49 and silver dropped $0.20 to $33.97 for a silver/gold ratio of 50.6.
It wasn’t a great morning for commodities in general with crude oil also down while palladium, copper and platinum managed to stay positive.
With the silver/gold ratio dipping toward 50, it’s time to start shopping around for some deals on silver and using dips in price like we saw on Friday as your signal to make a small buy. While the absolute price per ounce may not be particularly comfortable for a lot of small investors, it’s the discrepancy between the price and silver and the price of gold that signals to me that silver still has room to run.
With a little legwork and shopping around you can find some pretty good deals on silver before the holidays. Your local precious metals dealer needs cash around the holidays like everyone else and if you have some money burning a hole in your pocket it’s a good time to make friends in the business.
If you’re new to precious metals investing I would suggest two books for some weekend reading: One is Rich Dad's Advisors: Guide to Investing In Gold and Silver: Protect Your Financial Future and Hunter Riley’s Stack Silver Get Gold - How to Buy Gold and Silver Bullion without Getting Ripped Off! Those are inexpensive and well worth a read. If you have specific questions or are interested in buying a large quantity of silver and gold, I would suggest calling our office at 877-515-1050 and speaking directly with one of the traders.
Personally, I prefer to stick to bullion-priced products because the markup is lower but many people do quite well trading gold and silver coins. That’s fine but understand because coins are more difficult to produce that you’re paying a higher premium over the spot price of the metal.
In an economic world where your money is nothing but blips in a computer somewhere and Wall Street pays smart people to do nothing but sit around and figure out new ways to skim a few pennies out of your 401(k) and brokerage account, it’s nice to have part of your investments in something solid. Precious metals will hold some relative value, understanding that the price of everything is wildly inflated by derivatives trading.
I trust the silver in my safe more than the blips in my bank’s computer.
Chris Poindexter, Senior Writer, National Gold Group, Inc