It's time to care again about gold and silver

INDRANIL MUKHERJEE/AFP/Getty Images

It's been a while since I've covered the precious metals in an article. They've been range-bound for much of the past year, with few notable sector developments to report.

But I feel compelled to write about them today for two reasons:

  1. The probability of an upwards re-pricing of the precious metals is rising, and
  2. Both gold & silver are quite over-sold right now, technically-speaking.

With technical and fundamental indicators flashing green simultaneously like this, now is an advantageous time to consider increasing your PM exposure (I did so myself yesterday).

The Human Factor

Before I go into further detail on the current conditions of the PM market, here's a recent personal experience that underscores how few people have any real familiarity with gold & silver as an asset class, let alone own any (beyond, perhaps, a bit of jewelry).

A good friend moved and needed help transporting some bullion from his old town to his new one. Most of it was silver, several thousand ounces worth.

That much silver is pretty friggin' heavy.

So we huffed and strained, hauling that load out of one bank vault, into his car, and from there into the vault at his new bank. While we did our best to be as discrete as possible, our sweaty, grunting 2-man production was hard for the bank staff to ignore.

Managers at both banks figured out what was going on, as it was pretty obvious. And both separately asked us out of genuine curiosity, "Is that real silver?".

My friend briefly handed over a 100-oz bar so they could see for themselves, sparking conversations about the merits of owning physical bullion.

It turns out that neither manager had ever held a bar of silver before. This was pretty shocking to me. Even though they know that the safe deposit boxes in their own vaults very likely store some bullion, neither own it personally, nor even come into contact with it. It's just not a part of their world.

Anyways, later on I mentioned this story to another buddy who shared my surprise. "Man, if the bankers aren't familiar with silver and gold, then who the heck is?", he asked. A very good question, I agreed.

But then he jolted me by asking: "So, one of those 100oz bars -- what's it worth, anyways? $150?"

This is an otherwise intelligent, math-competent person. But like most folks, as well as those bank managers, he doesn't own any precious metals and so his knowledge of them is pretty limited. Limited enough to underestimate the price of silver by over 90%.

This reminded me of Mark Dice's videos, which show just how woefully ignorant the average person is when it comes to the value of bullion. In this one, street passersby decline a free gold coin in favor of a Snicker's bar:

Simply put: gold and silver, in the West at least, are underappreciated assets. As Grant Williams famously put it in his excellent synopsis, when it comes to public and institutional sentiment of the precious metals, "Nobody cares."

Which is a big factor why the prices of PMs have languished for the past seven years. And why the flow of bullion has been uni-directional from West to East over that period.

Time To Care

But there are gathering signs that it's now time to start caring again.

Looking at the just techinical side for a moment, both gold and silver have been in a prolonged downtrend for the past two months. They're now at extreme undersold levels.

Both RSI and MACD indicators are signalling that the recent declines have likely been played out at this point:

Gold price chart

Silver price chart

And both metals have now broken below their Bollinger bands (a sign of extreme oversold conditions). Here's gold:

Gold Bollinger Band chart

While a break below the Bollinger bands could indicate that something fundamental has suddenly changed in the PM market to merit a materially lower repricing, there just don't appear to be any credible candidates for that argument. Yes, the dollar has risen over this period; but there are solid reasons that the USD and gold/silver need not always trade inversely to one another. And as we'll get to in a moment, conditions are actually becoming more PM-favorable.

Technically-speaking, it seems much more likely that the current downtrend is long-in-the-tooth and that, as prices dip down to 18-month lows, a recovery is soon due. In fact, we may be seeing the start of such today, the first material up day for the PMs in a while.

Fundamentally-speaking, world events are providing more and more reasons to own gold and silver -- from stratospheric asset bubbles threatening to burst, to a long-overdue return of market volatility, accelerating de-dollarization, slowing global economic growth, increasing credit market risk in both Asia and Europe -- the list goes on and on.

The full set of PM-positive drivers are covered in our recent excellent interview with Ronald Stoerferle summarizing the insights of his exhaustive 230-page annual report titled In Gold We Trust. If you haven't listened to it yet, carve out 49-minutes to do so soon:

To the many reasons Stoerfele gives in support of his conclusion that gold is "dirt cheap" right now, we can add the multiplying macro data points predicting market turmoil and economic recession later this year, as well as the building uncertainty of further rate hikes by the Federal Reserve -- all potential developments that should lead to higher PM prices.

Whether you're amassing bullion for the long term (which we've long recommended) or speculating in the paper markets for the short term (something we don't encourage for the average investor), you want to buy low and sell high. With precious metals trading near 18-month lows and close to the "all-in" production cost for many miners, prices are unlikely to get much lower than this.

Taking Action

So while prices remain at current lows, we recommend considering the following:

  • Creating your core physical precious metals position if you have none. Many PeakProsperity.com readers already have their core positions in place, should an abrupt crisis occur that suddently sends demand for 'safe haven' assets spiking. But if you haven't built yours yet, don't panic. But also don't delay too long in taking action. A good first step is reading our free guide Buying and Storing Gold & Silver, which details the various forms you can purchase bullion in.
  • Setting up an ongoing purchase program. The easiest and most affordable way to build exposure on top of your core position to set up an automatic purchase program that buys a consistent amount of bullion each month at a volume that fits within your budget. The MetalStream service offered by the Hard Asset Alliance is a good example of such a program, through which you can set up automatic purchases of as little as $100 per month.
  • Nibbling into the miners. The stock prices of precious metal mining companies are much more sensitive to the spot price of gold and silver than the actual metals themselves. They can yield fantastic returns during bull markets, as well as widow-making losses in bear ones. And widow-makers they have been for the past seven years. But, for the above-mentioned reasons, that long winter may be thawing. For investors with the constitution and resources to speculate, it's an opportune time to consider adding or increasing exposure to the miners. That said, when doing so, we *strongly* urge to you work with a profession financial advisor with longtime experience with this asset class *as well as* demonstrated expertise with using hedges to protect these high-risk positions to the downside. If you're having difficulty finding an advisor who meets these conditions, consider scheduling a consultation with the firm we endorse (it's completely free).

Remember, right now, nobody still cares about the precious metals. Which is why it's estimated that only 1-3% of US households own any (jewelry aside).

So even if you only hold a few ounces, that's still more than 97-99% of everyone else -- which may make a tremendous difference to your prospects when the world starts caring again.

From food and job shortages to the prices of building materials "skyrocketing," the world is currently moving into what could be the "perfect storm" for politicians to push for a universal basic income, explained Glenn Beck on the radio program.

"We really need to look at the economy and be prepared for what is coming," Glenn said. "I feel like my job is to warn you of the things that are coming and, when I can, give you ways to navigate around. But at least so you can hear the warning and decide yourself what you're going to do with that."

Glenn explained that now, for the first time, there is a shortage of starter homes and building supplies just as increasing numbers of millennials are in the market. Also, analysts are predicting that shortages of food items and products such as pork, polystyrene, and chlorine could send prices soaring. Then there's the matter of unemployment, kicked off by the COVID-19 pandemic and likely to worsen because of the technological revolution, there are going to be fewer and fewer jobs for people to do.

"We are creating this perfect storm, right now, where universal basic income is going to be embraced by people," Glenn warned. "It's just this nasty cycle that we're beginning, and we're watching it unfold right in front of us."

Watch the video clip below to hear more from Glenn:


Want more from Glenn Beck?

To enjoy more of Glenn's masterful storytelling, thought-provoking analysis and uncanny ability to make sense of the chaos, subscribe to BlazeTV — the largest multi-platform network of voices who love America, defend the Constitution and live the American dream.

More than 100 business leaders and CEOs from some of the world's largest corporations recently met during a Zoom meeting to discuss how they can band together to fight "election integrity laws," like the voting law recently passed in Georgia.

On the radio program this week, Glenn Beck explained how this government-corporation partnership is not only proof of fascism, but it is also demonstrative of how our lives will be under The Great Reset: government and large corporations will work together to set the rules, and the freedoms of the individual American will be squashed.

"I want you to understand ... everything that they have ever said about, 'oh, it's a conspiracy theory' about The Great Reset, you can throw that in the garbage now," Glenn began. "Something happened this weekend that is absolutely unprecedented. I have done this job, for ... I don't even know how many years, almost 50 years, and I've never seen anything like this.

"People that were on the [Zoom] call, they talked about potential ways to show how they opposed the legislation, including ... delaying investments in states. That's blackmail," Glenn continued.

"So these corporations, they're going to act as a — what? A secondary government? ... I don't know. I didn't elect the CEO of Merck. Did you?" he said.

"Corporations [are] openly meeting and coordinating efforts to change laws," Glenn added. "This is fascism, guys! Fascism is when government and corporations work hand in hand. That is fascism."

Watch the video clip below to hear more from Glenn:


Want more from Glenn Beck?

To enjoy more of Glenn's masterful storytelling, thought-provoking analysis and uncanny ability to make sense of the chaos, subscribe to BlazeTV — the largest multi-platform network of voices who love America, defend the Constitution and live the American dream.

A virus has escaped the university labs and is super-spreading through our culture. It's called Critical Race THEORY and what used to be a fringe topic in the academic world is now a dangerous Marxist REALITY infecting our public schools where students are taught the U.S. is a "parasitic system" based on the "invasion" of "white male settlers."

On Glenn TV this week, Glenn Beck exposes how some teachers are being instructed to "cash in on kids' inherent empathy" in order to train them to become "activist intellectuals," starting as early as first grade.

CRT is an absolute toxin to America and Glenn warns that in just one generation the Constitution, freedom, and true equality will be totally destroyed. Yet, any opposition to the spread of this disease is shouted down as racism and bigotry. If Critical Race Theory is not already in your local school curriculum, it will be soon.

Joined by Asra Nomani, Vice President for Strategy and Investigations at Parents Defending Education, Glenn arms you with the facts about CRT so you can stand up to this tyranny in your community.

Watch the full episode below:


Want more from Glenn Beck?

To enjoy more of Glenn's masterful storytelling, thought-provoking analysis and uncanny ability to make sense of the chaos, subscribe to BlazeTV — the largest multi-platform network of voices who love America, defend the Constitution and live the American dream.

Ezra Levant, founder of Rebel News, joined Glenn Beck on the radio program to describe the shocking footage he and his team captured of Canadian police harassing and even arresting Rebel News reporters during a protest in Montreal.

Video clips show officers making remarks about the "Jew" reporters and calling Rebel News "Jew media." Reporters are pulled out of crowds, handcuffed, slammed against vehicles and arrested. Some have been fined "thousands and thousands" of dollars "because they had cameras pointed at the police," said Levant.

Another video clip shows Canadian police demanding entrance to a rented Airbnb houseboat without a warrant.

"They the claimed it was an illegal gathering. It was just a B and B," Levant explained. "I told them to get a warrant. I went out there ... and they wouldn't let me back in.... It turned into a ten-hour standoff. They couldn't find a judge willing to give them a search warrant, so to punish us, they called the whole thing a crime scene. They actually wouldn't let any of my team off the boat unless they submitted to a personal search, which is illegal. And the craziest part, is that they arrested one of my guys, took him to jail, and they said this to us: We will hold him in jail until you let us search the Airbnb without a warrant."

Levant said nearly all Canadian media have ignored the insane attacks, warrantless searches and seizures, and the jailing of journalists, and warned Americans to take note and protect our First Amendment rights.

"If you do not protect your First Amendment, if you do not hold those hard-won freedoms, you will be like what we are," he said. "This is your future if you don't protect your First Amendment."

Watch the video below for more details:

Want more from Glenn Beck?

To enjoy more of Glenn's masterful storytelling, thought-provoking analysis and uncanny ability to make sense of the chaos, subscribe to BlazeTV — the largest multi-platform network of voices who love America, defend the Constitution and live the American dream.