Don't Kick Yourself Later for Not Buying Gold and Silver Now
Source: Seeking Alpha, Peter Cooper (2/17/09)
"A trend is your friend, especially if you take advantage of it. For gold the question is how best to leverage the uptrend."
A trend is your friend, especially if you take advantage of it. For gold the question is how best to leverage the uptrend.
Gold and silver stocks are the answer. Conveniently, precious metal stocks got really thrashed last autumn - along with gold and silver and every other asset class except bonds. So they are dirt cheap.
But will gold and silver equities not fall again if global stock markets tank? No they will not if precious metal prices are rising - and not falling as they did last autumn.
And why will gold and silver prices keep on rising this time? Well, investors are now very worried about bonds and currency rates, and that leaves gold and silver as the last safe haven in the investment universe.
Gold and silver producers are also big beneficiaries of falling energy prices this year, as up to a quarter of production costs go on energy. In addition, most mines are in non-dollar economies, so manufacturers have costs in depreciated currencies and income in the strong dollar.
That means that even if precious metal prices stagnate - and that looks highly unlikely - gold and silver producers are among the only commodity producers that will see profits jump in 2009.
The people who will be kicking themselves later in the year will be those who do not buy gold and silver stocks now.