Time to Buy Some Physical Gold or Silver Insurance

Gold and Silver have been going sideways-to-up since December 2015. I believe they are going to take off shortly for a whole number of reasons. We know what some of those might be from prior experience:

·         The mini banking crisis that began in March 2023 with Silicon Valley Bank.

·         When Russia invaded Ukraine in February 2022.

·         When the Fed cuts rates and prints money via QE, as in 2020 and 2008.

The move into monetary metals like Gold and Silver in each of these cases was primarily a run to safety in uncertain times amid the risk of further dollar devaluation.

The problem is that all of these events or worse are likely to happen again.

The Banking system remains extremely fragile, especially as commercial real estate deteriorates. In addition to the Ukraine war, we now have another war in Gaza. There is also the possibility of an invasion of Taiwan. World War III is no longer a wild possibility. Wars cost money, lots of it, usually printed out of thin air.

The U.S. government’s budget deficit is now in the trillions and rising. The debt is astronomically high, closing in on $35 trillion! Foreign investors are buying fewer and fewer bonds while the supply of new Treasuries to fund the deficits and debt soars. Who is the buyer of last resort? The Fed. They print dollars to buy the bonds, which devalues the dollar. 

The economy is doing just great according to official government statistics, but under the hood, no one is hiring and bankruptcies are soaring, as are auto-loan and credit card defaults. Home foreclosures are on the rise again. The median home price is falling faster than in 2008. Consumers are tapped out. Tax receipts are falling while spending continues to rise. No wonder the deficit is rising fast, which means more bonds, bought with more printed dollars.

What happens if the stock market crashes? The Fed will be forced to cut rates and revert to QE again. Expect more printed dollars. You can’t print Gold and Silver.

Meanwhile, what are the central banks doing? They’re buying Gold at record levels.

We are just one event, one crisis, away from some serious financial repercussions that will substantially benefit precious metals now and for years to come.

This is just a recap of the big picture and why you should own at least ‘some’ physical metal now as an insurance policy if nothing else. 

However, in the short-term, I believe Gold, Silver, and the miners could continue to rise significantly. I am expecting Gold to hit $2400 and Silver $30 before the next big pullback. There is a very real possibility that we will never see the current prices again.

The only caveat to this forecast is an imminent stock market crash. But even that is likely to be brief but sharp, just delaying the inevitable march higher.

The time to buy ‘some’ metal is now.