This is a question I get often, especially these days. With the gold spot price at all-time highs and silver nearing its high for 2023, and up over 20% since March alone, is now a good time to buy? With the current spot price for an ounce of gold at $2,773 CAD and silver at $33.95 CAD, for those who've been "stacking" for some years these prices are higher than used to, especially for gold. Not that long ago in 2019, prior to the "plandemic", an ounce of gold was around $1,750 and silver was around $20.
To help answer the question "is now a good time to buy gold and/or silver?", I think we need to look at what affects their prices.
Money supply - Since 2020 especially, the amount of cash that governments have printed has been unprecedented and this means that the more of it printed de-values the dollar, has more $ chasing fewer goods/services which pushes prices up (inflation) and reduces our purchasing power. In the U.S. 🇺🇸 in 2022, 80% of all U.S. dollars in existence ever were printed between 2020 and 2022. In Canada 🇨🇦, Trudeau has added more national debt than all previous federal governments combined. Think about all this for a minute and how are your finances and investments positioned to deal with it and maybe take advantage?
Value of the dollar - In an environment where interest rates have been rising, this often increases the value of the dollar as it makes it relatively more attractive as an investment as investors buy government bonds (U.S. Treasuries, Canadian government bonds, etc.) - investment capital flows to them and away from other assets such as stocks and precious metals. Lately, with interest rates pausing and likely heading down in 2024, this will make bond prices more expensive and yields decrease shifting money flows into precious metals (physical gold and silver and mining stocks) and commodities in general thus putting more upward pressure on gold and silver prices.
Geo-political events - You've likely heard the term "flight to safety" or "safe haven in times of turmoil" which refers to money moving into gold often when wars break out, a terrorist attack, or other events which cause nervousness or uncertainty with investors and those looking to protect and preserve their wealth. When times are uncertain, investors try and protect their assets and wealth and often do so with gold. These days, we can say that there is much uncertainty around us and the flight to safety is a long-haul flight for some time still. Plus, with all of the nonsense of the past few years with frozen bank accounts, lack of financial privacy, CBDCs, bank failures, and everything else which we are all too aware, holding physical gold and silver is safe and gives us financial privacy, protection and ultimately more options.
Supply and demand - Looking at silver particularly, since 2014 where supply was at 1,054 million ounces, it has been steadily decreasing where in 2023 it stands at 1,024. On the demand side, it has been increasing where in 2014 it stood at 1,011 million ozs in 2023 it's 1,167. Consider our current and future demand for silver and you can easily see that upward price pressure is inevitable and necessary to encourage mining companies to boost production and exploration to keep up. Silver is highly valuable in society as it's used in electrical switches and solar panels to chemical-producing catalysts and electric vehicles, silver is an essential component in many industries. Its unique properties make it nearly impossible to substitute and its uses span a wide range of applications. Almost every computer, mobile phone, automobile and appliance contains silver. It is the perfect substance for coating electrical contacts – like those in printed circuit boards – because of its high electrical conductivity and durability. Painting silver ink on any non-metal surface provides an electrical pathway, eliminating the need for wires.
WHAT WOULD I DO?
Have a plan (purchase and exit strategies) - Know why you're acquiring precious metals - is it for retirement down the road, savings, wealth preservation, investment, legacy to your family, etc.? Know what to buy and do it regularly based your plan. Know when you would sell or swap. For example, if silver shot up in price to a point where you could swap it into another precious metal which was less expensive, platinum, and you could 10x your weight for free, would you? I would!
Buy the dips - No investment goes straight up linearly as there are always short-term events which affect the price. Keeping an eye on the price can help you to buy gold and/or silver when it goes down and this can be a great way to dollar-cost-average and add more weight for less over time. Take advantage of sales throughout the year such as Black Friday. This can be a great way to save $ and add weight for less or even pick up that special coin or bar you had your eye on but maybe just out of your budget!
Determine the % of precious metals you want in your overall investment portfolio- Given everything written in this article, precious metals could play a significant part of an overall portfolio. It depends on your specific goals, situation, and needs. One strategy that I use is a diversified portfolio of physical precious metals, high-quality dividend funds which pay passive income each month, and growth stocks to take advantage of some of the best value/low risk investments based on market conditions which today are commodities (e.g. oil & gas, uranium, coal, iron ore, gold and silver mining and royalty companies).
"If you don't hold it, you don't own it" - You can't go wrong swapping toilet paper currency for real physical money. There is peace and comfort knowing that your wealth is stored safely away and that you can touch it and use it whenever you need to. It's not digits on a computer screen which could be stolen at anytime or when the government or others can see how much you have or on what you're spending.
So, what do you think? Do you wait to buy gold and/or silver given their current prices hoping they come down a little? Perhaps this is just the beginning of a whole new price run where we could have explosive gains given the current environment?
Knowing how to get started can be scary, frustrating and lead to procrastination. Another week, month or year has gone by without action in moving towards what you really want - financial security and peace of mind that you're not risking your hard-earned money in risky stocks or worried that your nest egg is losing value or may not be there for you when you need it.
✨ Looking for a consultation to discuss your situation and any specific questions you may have about precious metals and how they could fit into a diversified investment portfolio? How to get started, what's available, how to buy, where to buy safely, how to store, what's a good price, do you buy coins or bars or both???
👉 Book a private consultation with me so you can get some answers and to get started now on the road to financial independence, choice and fulfillment - and peace of mind.
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