Yestedarday was another one of those odd welcome to the global market days when gold is “up” at roughly the same levels as the day before
Gold was hovering near previous support levels, up $1.71 to $1,643.30 and silver was up $0.14 to $30.91. That raises the silver/gold ratio to 53, the highest reading in the last eight weeks.
It’s started out as a good morning for commodities overall with gold and silver being joined by platinum, palladium, crude oil and copper all on the upside.
Markets are flat today in anticipation that the Great Oracle of the Currency Printing Press, otherwise known as the Federal Reserve, will issue a vague and obtuse statement about the economy at 12:30 this afternoon. Wizards, pundits and market makers will agonize over every paragraph, trying to find clues in the words, and everyone will pretty much see whatever supports their current view of the economy. Doomsayers will new reasons to fret over unseen dangers; the optimistic will find new reasons for hope.
For precious metals investors, these are the times having a disciplined approach is some comfort because it doesn’t matter what the Fed decides to do. Continue making your small, regular buys and be sure to note the cost basis, including shipping, when you add those coins and bars to your collection.
While there are certainly scams in the gold and silver markets that one needs to be cautious to avoid, precious metals are not a ponzi scheme. There is a finite amount of gold in the ground and, every year, that gold gets harder to find.
Gold and silver are limited resources and will always hold some relative value, even if it’s just as decoration we hang on our bodies, and that’s what separates precious metals from money. Money can be anything from seashells to pieces of paper adorned with images of our ancestors, whatever we collectively decide to use as currency. But precious metals are measurable both in terms of weight and quality and that does not change.
There’s a certain comfort in that certainty with precious metals. The cash that I have is little more than numbers in a computer somewhere that can be exchanged for pieces of paper adorned with images of our ancestors.
Numbers in a computer being traded for pieces of paper. Doesn’t exactly inspire one with confidence when you put it that way, does it?