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It already feels like a lifetime ago.

During gold and silver’s correction from April to June, some panicked. The “weak hands” in paper gold ran for the hills, and gold ETFs suffered staggering outflows.

The “smart money” saw an opportunity; all of the facts still supported gold and silver. Maybe the correction was simply that: a correction. Any healthy bull market experiences them. Maybe the drop in price was due to manipulation by the banks. Maybe it was because of cosmetic forces. Whatever the reason, one simple fact remained obviously clear: the fundamentals have not changed. We said it on April 21 (4 Reasons Why Gold Makes More Sense Than Ever) and we’ll say it again: the Fed continues to print $85 billion a month, interest rates remain near zero, currency wars are raging around the world… the list goes on.

For all these reasons, in that same piece on April 21 we quoted Pierre Lassonde as calling for a “V-Shaped Bounce” for gold and silver.

This was an opportunity for the “smart money”. So not only did they hold onto their physical gold and silver, they took possession of more.

Since its recent low on June 27, gold is up nearly 15% and increased nearly 5% last week alone.

Silver is up even more. From its recent own low on June 28, silver is up over 22% and increased an incredible 12.4% last week – its best weekly performance in nearly five years.

Could this be the beginning of the “V-Shaped Bounce” predicted in April?

Silver has something else going for it. On June 27, the gold-to-silver ratio was 66-to-1. In the last 7 weeks the ratio has narrowed to 60-to-1. You may often hear 16-to-1 cited as the historical ratio between gold and silver, which would suggest that at gold’s current price, silver’s value is closer to $85. While we believe that the 16-to-1 ratio may no longer be relevant, what if the “new normal” for the ratio was 30-to-1, or even 40-to-1? That would suggest that silver is still undervalued by 30% to 50%.

Gold and silver are on the move. If you haven’t bought yet, don’t despair; even though you may no longer be able to buy at the absolute bottom of the dip, both metals could still increase by much more. But don’t wait any longer; if you’ve been thinking of getting into gold and silver, or if you’ve been thinking about taking possession of more gold and silver, NOW is the time to act. Call us today.

Precious metals on the move

London Fix PM price at week’s end, and change over previous Friday:

  • Gold: $1,369.25, up 4.6
  • Silver: $22.83, up 12.4%
  • Platinum: $1,524.00, up 2.1%
  • Palladium: $762.00, up 3.1%

In the news

Gold analysts most bullish since March on physical demand
“People buying physical gold are more about having a store of wealth in the medium to long term whereas the ETP liquidations are more the speculative side. Physical demand remains very robust. People see gold prices as good value at these levels.” – Mark O’Byrne, GoldCore (link)

World is totally upside down; I want to own assets that are inflation-proof
“Our whole investment modus operandi is to get involved in those industries and companies that will gain from an inflationary event. I’m more bullish on gold now than I’ve ever been… The world is totally upside down right now – it’s completely crazy. I don’t know of another time when every country in the world was printing money… I don’t wait for inflation. It’s hard to call, but it’s impossible for me to see the U.S. getting out of trouble without printing more money and it’s impossible to see how Europe survives in the form that it’s in. You look around the world and you say: ‘We’re going to have to have some inflation.’ I want to own assets that are inflation-proof… I’m keen on anything that’s going to live with higher inflationary numbers, because I can’t see the world getting out of the problems that it’s in.” – Ned Goodman, founder and chief executive officer of Dundee Corp (link)

Gold’s rise: Not *if* but *when*
“The risks of a major lasting downward gold-price correction are significantly less than the possibility of a quick bolt into higher territory and the re-establishment of the long-term bullish trend… As we move into autumn, expectations of early Fed tapering should diminish, putting gold on a firmer footing… To my mind, the question is not ‘if’ but ‘when’.” – Jeff Nichols (link)

Spotlight on Silver

Is silver back in the bull market?
“One of silver’s biggest components for use is industrials and we think that that’s really what has given silver a decent shovel off.” – David Lennox, resources analyst at Fat Prophets (link)

Chart of the week

Physical gold surges as gold ETFs experience massive outflows

The week ahead

  • All eyes on Jackson Hole during annual meeting of central bankers and policy makers
  • State of housing market in focus: reports due on new and existing home sales, and the FHFA house price index
  • Minutes from the latest FOMC meeting to be released Wednesday