Market and Meaning is my weekly update on market movements and their meaning for you as an investor. Market and Meaning is normally reserved for premium subscribers but is currently being offered for free to all our readers. As always, everything here represents my personal views and not official recommendations or advice, please do your own due diligence and come to your own conclusions.
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All three are both backward and forward looking.
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GOLD AND SILVERGold (GLD) is at $1238.20/oz and Silver (SLV) at $17.27/oz. for the week. Gold is up for the week and silver only slightly so. One of my sources says that silver could fall as low as $14 within the month, time will tell. It's currently at its lowest point in 4 years. I actually took advantage of a great offer with free shipping to buy some more this weekend. It was just a nibble though as I am personally waiting for lower prices.
I still like this chart on how long many of our major energy and metal resources will likely last. The chart gives gold and silver both less than 20 years. Personally, that alone gives me reason to want to at least own some of both. I don't want to look back in 20 years and kick myself for not buying an asset that is so limited. Take note, a chart like this assumes current trends continue regarding mining and consumption and these are never guarantees.
I've been calling for a big drop for some time now and it looks like it could be upon us. I've said that gold below $1200 is a good range for me, and it's almost there now. I'm hopeful for even lower toward the $1000 range or below. It looks like these lows will hit in October or in early 2015 if the metals rebound a bit from here, but October is looking more and more like the winner.
Don't get thrown off if prices jump again before the ultimate drop to lower lows. A short-term rally does not necessarily mean a bigger drop is not still coming.
That said, if I did not own any physical gold or silver, I would consider the current prices to be a very good entry point for long-term investment. One of my favorite gold sources recently said that he expects the metals to at least double from current levels. It is important to reiterate that I am talking about owning physical gold and silver coins and bars, not stocks or ETFs. My favorite coins are U.S minted Silver and Gold Eagles, they are universally recognized and offer tax protection. For information on how to buy gold and silver, please see "How To Buy Gold And Silver."
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BITCOINBitcoin is sitting at around $382.92, up a little bit for the week. I am currently holding my very small Bitcoin position. Is another run-up to $1000 or more possible? It sure is, but everything regarding Bitcoin is speculation. Primary problems are that governments don't like it, it is highly volatile, and far from widespread adoption. It also doesn't have a very good reputation in the eyes of most. People either don't know what it's, or thinks it's for drug dealers. My growing inclination is to believe the currency will not last in the end. There seems to be great interest in the technology behind Bitcoin, but not enough hope in the currency itself. I have always considered it to be speculative, but now perhaps even more so.
I continue to urge caution as we still think Bitcoin is a lottery ticket that could grow 10-100x or more and could even more easily go to $0. Caution and small amounts of money are strongly advised. For information on how to buy Bitcoin as well as my views on investing in it, please see my article, "How To Buy Bitcoin."
Disclosure: I own gold and silver bars and coins as well as some Bitcoin.
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