This is the slowest precious metals market in decades. The good news is that slow markets often are signs that bottoms are being put in. But, let’s consider the causes of this lackadaisical market.
The primary cause is that the many stock indexes are making new highs, with the most watched, the Dow Industrials, only a few points from punching out a record high. Such stock market action causes even the most fervent metals investors to question their commitments to gold and silver.
When stock action is erratic or has moved to the downside for substantial time periods, even devoted stock buyers sometimes turn to the metals. Obviously, that is not the case now.
Another reason for this slow market: the news media refuses to discuss the serious problems that the US faces. Watch CNN, and it’s all about alleged Trump ties to Russia. Click on Fox News, and hear all the reasons why CNN has it all wrong. Also on Fox, there’s a lot of cheerleading for stocks, which, admittedly, have performed well since Trump’s election.
However, David Stockman, Budget Director under Ronald Reagan, is adamant that stocks are in a bubble and that Wall Street is a casino. Stockman says that stocks will crash when the investors realize that that there will be no tax deal anytime soon and that most certainly there will be no tax stimulus.
Further, Stockman notes that the Treasury regularly runs a deficit of $60 billion a month, and with only $167 billion cash on hand, will run out of money by August. Then Congress will be forced to deal with raising the debt ceiling, which should garner huge publicity.
Presently, the ceiling stands at $19.809 trillion, and any hike will put it above $20 trillion, a scary number in anyone’s book. After all, the national debt stood at only $11.657 trillion when Obama took office. When Reagan took office, it was less than a trillion ($998 billion).
When this matter makes headlines and is discussed on news and talk programs, gold and silver most undoubtedly will enjoy good moves to the upside. I recommend not waiting until then to buy the metals.
As noted in Now is the time to buy old US gold coins, old US gold coins are selling at bullion coin prices. Further, many common gold bullion coins, such as Krugerrands, can be found on our Gold Specials Page at discounted prices. The same is true for many standard silver bullion products on our Silver Specials Page.