Bill’s Blog | July 14, 2022
Many of my clients have purchased physical investment-grade precious metals (gold and silver) over the years to protect their purchasing power and diversify their wealth. I have done this myself for over twelve years and have been very happy with the decision. I partner with one of the top bullion dealers in Canada and ensure preferred pricing for my client on the purchase and the sell side. In addition, we use Brinks for storage with their world-class vaults and a 150-year track record of no losses ( allocated, segregated, audited, liquid and insured) at a very reasonable storage rate.
So, why should one have gold, silver, or both as part of your overall wealth strategy?
- Wealth preservation.
- Precious metals are an excellent saving strategy, and silver and gold are very liquid. They can be purchased or sold from Monday to Saturday and money in your bank account in most cases in 1 to 3 business days. In light of what happened last week with the Interac system down from coast to coast, it reminds us how fragile our banking system is. Gold and silver outside the banking system are highly safe and accessible.
- Are gold and silver too expensive? The problem is most people have too short of a timeframe and do not see longer-term trends. Here is BIG Picture:
- Gold and silver have been in a long-term secular bull market since the early 2000s.
- Gold started at $260 oz US in 2000 and rose to $1800 US by 2011. Gold corrected to $1067 in 2015 and rose to $2000 in March 2022.
- Gold has risen in the last twenty years by $1412.00 US or 442.65%. Excellent return!
- Gold is down $98.58 over the last year (minor correction) or -5.39.
- Silver’s price in 2002 was $4.07 US and rallied to $41.47 US in 2011. Silver corrected to $13.86 US by 2015 and reached $27.57 US in March 2022.
- Silver rose $14.07 US in the last 20 years, or up $278.92%. Great return!
- Silver as of today is $18.44 US and down $7.21 or over the last year -27.38%. Silver always is more affected in a bear market/recession due to its industrial uses.
- Protects wealth during a financial crisis, and for those unaware, we are in a growing economic and financial storm based on many metrics. In 2022, the markets have already lost 30 trillion in value (stocks, bonds and crypto), multiple currencies have crashed, and sovereign debt disasters are brewing. In addition, China has a severe banking crisis as there real estate bubble is bursting.
- We risk Central Banks reversing course for QT (quantitative tightening) to QE (money printing). When they do, it will be massive money printing from the mess they have created, and gold and silver will skyrocket. Central banks cannot print food, oil/gas, commodities, gold, silver, or fix the severe supply chain issues.
- Gold loves a recession. Historically, precious metals perform strongly in prolonged economic downturns. Silver is more economically sensitive, as over 50% of the silver mined is used industrially. However, silver can still do very well in a recession due to its monetary quality.
- The severe global inflation saga will continue and eventually benefit gold and silver.
- Gold and silver are unloved right now and on sale. I like purchasing things at a discount, especially hard assets.
- Stocks, bonds and real estate are still highly overvalued and risk further downside.
- Geopolitical risks are at the highest they have been since post WW2.
- Finally, irresponsible politicians will continue to destroy our purchasing power by running extreme deficits. Canada sadly is a leader in this offence, but not alone as this has become a global problem in almost all Nations. You can never print your way to prosperity; history has proven this thousand of times and destroyed national currencies and countless people’s lives.
So can gold and silver continue to correct? Absolutely, but the downside risk is relatively tiny compared to the potential upside over the next few years.
- Gold was in a narrow trading range between $1800 and $1850 in 2022. The exception was the spike in price to over $2000 when the initial Russian invasion occurred in the spring. Gold recently broke $1800 and now hovering in the $ 1700s. The current gold pricing is an excellent value as long as you have a multi-year time horizon.
- Silver is consistently more volatile than gold which is pure monetary metal. As a result, silver is even a better bargain in the $18 US range if you are an investor. The volatility works both ways, and when the precious metals markets come alive again, silver will blow past gold in performance.
- Silver’s all-in cost for miners is around $18 US, so I believe silver will have strong support at that level with minimum downside risk. The only exception would be a massive market crash, but even if that were the case as in 2008, both metals recovered and went to record highs shortly after.
So, here are some Action Steps:
If you have never understood gold and silver as an excellent investment asset, please download for free and read Mike Maloney’s NY best seller: GUIDE TO INVESTING IN GOLD AND SILVER” PROTECT YOUR FINANCIAL FUTURE. Then, please scroll to the bottom of the page on my website to access it.
- Please reach out to me, and we can discuss a strategy for building a precious metals position for you. I have helped clients with a few hundred dollar orders to hundreds of thousand dollar purchases. Available to anyone in North America. Here are a few crucial questions. How much gold vs silver should I purchase? Or should I have only gold or only silver? Do you want to take personal delivery or have it stored? What type of allocations should I purchase? Bars or coins and what types? Not to worry, I will answer all of your questions and provide guidance. I will also ensure you receive preferred pricing.
My contact information is email@example.com or 778-539-7107
Big Update: Bank of Canada does shock and awe, 1% interest hike rate. It just got a lot more expensive for LOCs and variable mortgage rates. Don’t hesitate to contact me if you need guidance or want to discuss your options with one of my referral partners specializing in mortgages.
Bill Westmacott, Owner