As of this writing, the prices of gold and silver have been brooding between the 10 -11 $ realm, this is due to a phantom demand caused by future contracts and other investments that promise to 'deliver' the physical metal at some future event. All of which are creating a scenario that there is a more than ample supply of the metal. Once the majority of the market aware of this scenario and when the future contracts fail and precious metals are not delivered to the doorsteps of the investors, the 'bull' market for these commodities will rise to exponential levels. You wouldn't want to buy the metals when the bull has started, hence the coinage of the phrase 'buy low, sell high'. Gold and Silver are overly undervalued at the present time so it is highly recommended to purchase as much as you can at this point in time.
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Investing in precious metals is a very sound strategy to "protect" our money from the ongoing worldwide economic turmoil. From the way I see things, the value of our money will severely be downgraded next year. The buying power of your money will be significantly lowered.
ReplyDeleteHence when you have investments in precious metals (gold and silver) you are protecting your money from losing its value. When the prices of commodities (including gold and silver) rise, you are effectively "freezing" the value of your money at the time you bought said precious metals. This strategy would work best if you invest in precious metals for the long term (at least a year).
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ReplyDelete~the earning student