Precious Metal Investing
This was a quiet week for most asset classes, except for Friday, which saw volatility unseen yet this year. The $50+ move in gold and the declines in the U.S.stock market were the single largest gains and declines in over a year. After steadily gaining through most of this year, the Dow Jones turned red on the year on Friday. This move was extreme, and we believe it was so extreme because it was so overdue. The massive miss of the Non-Farm Payroll number was the specific catalyst but it was long overdue. Along with this miss came a massive reversal in the EUR/USD pair as the Euro benefited from weakness in the USD caused by the NFP miss. This USD weakness was a major part of why gold and silver went as high as they did as quickly as they did.
In order to contextualize this wild move for those we read our last post, the gold/Dow ratio has moved from 8/1 to under 7.5/1 in just one week. This is a significant move, and would have proved to be a great time tell sell equities and get into physical gold bullion. We expect this to be one of many significant catalysts propelling gold and silver to levels not seen in quite some time, and pushing this ratio close to 5/1 faster than people think. Last summer saw a sharp decline inU.S.equities and a significant push higher in gold and silver. Gold was actually closing in on the $2000 mark and silver was holding strong around the $40 dollar mark. The second the spotlight shifts away from Europe and onto theU.S.again we will see USD weakness and extreme strength in gold and silver. Before then please consider buying or adding to your precious metals investing.
All the best!