It's one of the hottest investments out there, and if you've read my blog you've seen me take both sides of the trade so I'd like to give you my short-term and long-term views for both gold and silver. Gold has been the hot investment the last decade, outperforming all major indices and most stocks. It's up over 600% from it's lows back in 2001. While this rise is dramatic, it's also completely justified. Central banks around the world have been printing money like mad the last 10 years, devaluing FIAT currencies and causing inflation. While the investor class has bid the price of gold up a few hundred bucks more than fair value, it isn't the main driver behind its rise. It's actually an illusion that gold prices have risen. In reality paper money has become less valuable. So I'll tell you right now that gold will never be below a $1,000 per ounce again. As we continue to print money and devalue currencies around the world, I can only see gold going higher. In fact, if you adjust for inflation gold is way of it's all-time high from back in the 70's. Short-term gold has gotten ahead of itself, and right now I'm short gold via the Proshares Ultrashort Gold ETF (GLL) and will be until around the $1,500 level. It could pull back further, but $1,500 is its 200 Day MA, so it should find some support there. Silver is a different story. I'm just as bullish on silver as I am on gold only more so. It has lagged gold this last decade and the same logic should apply. Printing More Money=Higher Precious Metal Prices. I think in the medium term silver has further to run than gold as it plays "catch up". It should pull back with gold over the next few months so in the short-term I'm staying away from both, but feel free to buy on the way down as the next decade could see bigger gains than the last.
No comments:
Post a Comment