Gold & silver have taken a beating this week but early returns today show both metals making modest gains. Silver is settling out after exchanges raised the minimums on margins – the amount that must be paid when leveraging. Silver dropped from the high of $49.79 to $34.58 before closing over $35 yesterday. Gold pulled back over $100 retracting to a $1473.10 close.
Many experts believe much like we do, the fundamentals of gold & silver are solid over the long term, in spite of the current retractions. Kevin Mahn, chief investment officer at Hennion & Walsh explained it to CNBC, For investors building a diversified investment strategy, they should be looking at them regardless of what’s happen in the markets the past couple weeks.
Profit taking, a slight increase in the Dollar , & raised margin requirements are three factors contributing to this current retraction. For the long term demand, dollar devaluation, the National Debt & impending inflation will continue to strengthen gold & silver for the remainder of the year. We still hold to a silver price nearing $65.00 & gold over $1,800 potentially to the $2,000 levels by the end of the year.
When you consider the Fed may actually cease QE, the propping up Wall Street profits will also stop causing many to consider metals as a safe haven investment. Until Wall Street settles into a post bail out mode we may see similar market volatility like the last month in gold & silver markets. J.J. Burns, head of J.J. Burns & Co commented on this to CNBC, Let’s see when the morphine client has that pain killer taken out and see how much pain comes back into the market.
The current retraction in gold & silver make now a great time to start or add to your current Tangible Asset Portfolio. Considering the volatility in the recent weeks, the basics upholding gold & silver remain solid. Hold on for a wild ride but the end results will be higher returns by the end of the year.