Gold started out the year 2022 at about $1,820 and ended the year right near the same spot, to within just a few dollars. Silver did the same, holding at $24. While there were ups and downs throughout the year, with gold dropping into the $1600s and silver dropping below $18 this past summer, they proved highly resilient in the face of high inflation and increasing interest rates to recover their losses by year end.
Now, after the first two full days of the new year, gold has hit a six month high. Gold has managed to climb more than $40 since trading started up again on Monday evening in Asia. Below is a screen shot taken as I write this post.
Is gold on its way to $1,900? Check out this article on Zero Hedge this morning, 'Gold could reach Bruce Willis levels soon', which explains in detail why gold and other commodities, highly undervalued compared to the paper markets, are primed for re-introduction as a medium of trade. The article strongly suggests higher gold prices.
Silver too is doing well so far as the new year begins. A bit topsy turvy but appears to really want to breach the $24.50 mark. There are few reasons to expect silver do do well this year but the most obvious is the high silver to gold ratio which at present is about 76:1. Historically, the ratio has been 15:1.
Another reason silver is so attractive is that it still remains the only commodity to NOT breach its 1980 high while gold has already breached its own 1980 high in 2011, in the summer of 2020 and again last spring. Silver is just waiting to explode higher.
Copper too is primed for a jump in prices, possibly going to $10 per pound in 2023, as mentioned in this Kitco article out this morning, 'Copper could reach $10 as markets gear up for commodity supercycle'. It has a lot to do with the Green Movement, primarily electric cars and their expensive lithium Ion batteries.
Commodities such as gold and copper remained relatively cheap in the last decade or so while home, vehicle, energy and food prices have skyrocketed. Now, with higher interest rates in the equation, we can expect prices to comes down as a result of demand destruction. I expect investors will run to commodities as their true value is recognized.
It's all part of cycles. One group goes up while the other goes down and then it reverses. Savvy investors know this and usually end up on the right side of a trade. Unfortunately, there will be many losers in this game as there always are. Investing in just a little bit of silver for example, is a simple strategy to stay on the winning side.
Diversification is key to successful investing and precious metals should be included in your investment portfolio. Consider investing in precious metals. Check out for more information. I make monthly purchases through them.
Just look at how well gold has performed since year 2000! It's gone up 5% just in the last 30 days.
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