Here’s the Long-Term Case for Precious Metals
The year 2013 brought us one of the best bull market in equities since the mid 90′s. At the same time, to fund equity purchases and flee ‘safe assets,’ we saw a historic sell-off in silver (NYSEARCA:SLV) as well as gold (NYSEARCA:GLD). This selloff has given investors an excellent chance to accumulate a long-term position in physical holdings and silver companies.
Gold and Silver seem to have found a floor around $117 and $18.50 only trading below these levels briefly. As the price of both have come down I have been recommending long-term investors, not “traders,” to dollar cost average and/or pyramid down into silver and silver equities. For 2014-2015, I am recommending silver, platinum, gold and palladium in that order and I think while prices are depressed it is a good time to buy for the long-term investor.
In fact, technicians are seeing bottoming action in the metals. We have an attractive price at which to come in long-term, but also have a ton of fundamentals on our side. One of my primary hypotheses is that the endless easy money policies from central banks around the globe have created a long-term tailwind for the various precious metals. Many on the other side of this trade disagree with this assessment, and some question it historically. Only time will tell which of us is right. What we do know is there is short-term pressure on the metals despite long-term fundamentals.