Bill’s Blog | October 18, 2023
After the 2008 Great Financial Crisis, I woke up on how our financial system works and realized how vital Gold and Silver play in preserving and building wealth and diversification. We had just gone through the second severe financial crisis of the decade. The Dot.com blow-up in 2000 created a 50% market crash, and the GFC in 2007-2009 repeated a similar crash. So, let us take a quick tour of history and see how Gold and Silver performed in each crash.
- The lowest price of Gold was USD 252.54 in late 1999.
- By the Fall of 2011, Gold would peak at USD 1900.
- From 1999 to 2011, there was a whopping 752% gain. Gold dropped about $250 an ounce after the 2008 crash (from $1000 to $750), but the price rapidly increased once the Fed turned on the digital printing press (QE) til the fall of 2011.
- Gold is up 421.73% over the last 20 years. The gains consider the correction of late 2011 to 2016, where Gold bottomed at around USD 1060. The S&P 500 was up 195% over the same 20-year period. You would have been twice as wealthy if you had owned Gold!
So, where are we today over the last year with Gold and beyond?
- As of Friday (October 13), Gold was up 5.96% YTD. From one year ago on Friday, Gold is up 17.53%.
- Gold trades between $1800 and $2000, with three tops of just over $2050 in the last three years. The all-time high of $2074.88 on August 7, 2020.
- I expect a significant breakout of Gold once the Fed stops the QT (quantitative tightening), possibly next year. Once Gold finally takes out the high, there will be no resistance, and the price will most likely quickly go from the $2200 to $2300 price range. Gold will be much higher over the next 5 to 10 years.
How did Silver perform over the same periods?
- Silver bottomed in 2002 at USD 4.52
- Silver would rise to USD 49.00 in the spring of 2011, for an incredible 1100% gain in just over nine years.
- Silver follows what Gold does, but not precisely, as it is far more volatile on the upside and downside.
- Silver bottomed during the Covid crash around UDS 12.00 but quickly rebounded to USD 30.00 in just a few months.
- Silver has provided an impressive 361.63% gain in the last 20 years.
- So, where are we today over the last year with Silver and beyond?
- Silver is currently down YTD by -5.15% but up over the last year by 24.31% as of last Friday.
By comparison, take a look at the Canadian dollar’s performance.
- CAD/USD 0.7321 as of Friday
- -0.78% YTD
- 1.65% over last year.
- Also, it is noteworthy that our dollar has lost another 4% purchasing power based on Government data; however, if accurately calculated, we have lost over 10% in the last year.
We will close with the risks and the upsides of purchasing both shiny metals.
- The downside risk for Gold in a significant correction could be in the $200 to $300 range.
- The upside price target for Gold over the next few years could be in the $3,000 to $ 5,000 range or higher, depending on circumstances.
- As mentioned, Silver is more volatile, and we could see a $6 to $8 downside in a major correction.
- The upside price for Silver over the next few years will be three digits, and we can see between $100 and $300 plus, depending on many factors.
- When the Gold/Silver ratio reaches 85 or more, it is screaming buy silver. (It takes 85 ounces of Silver to purchase one ounce of Gold.) As a note, the Gold/Silver ratio is 85!
- Download an excellent book for FREE from my website homepage, a PDF copy of Mike Maloney’s NY Best Seller, and scroll to the bottom of the homepage to see the link. Mike’s NY Best Seller is called: “GUIDE TO INVESTING IN GOLD AND SILVER” PROTECT YOUR FINANCIAL FUTURE. It is a great read to understand the basics, the history of Gold and Silver, why you should consider purchasing Gold and Silver, and what to avoid.
- Once you understand why you need to purchase precious metals, please get in touch with me, and I can answer any questions you may have.
- Then, I can help you with a very easy purchasing process with one of Canada’s most trusted bullion dealers. My clients receive a small discount upon purchasing Gold and Silver and better pricing when it comes time to sell some or all of your metals. We can do Cash, RRSP, RESP and TFSA.
- My bullion dealer also provides low-cost vaulting services with one of North America’s largest and most trusted vaults. 100% insured and audited.
- Are you going to perfectly time when to buy? Of course not. I have been purchasing on and off for the last 13 years and doing dollar-cost averaging, and I recommend you consider doing the same. The key is to build up a sizable position in Gold and Silver as we are in unstable times. As history has shown us, Gold and Silver do exceptionally well in uncertain markets in the long term.
- Many of my clients take a position (small or large) and then build upon it until they have between 10 and 30% of their networth in metals. Two significant independent studies (one being Harvard) were done a few years back on how much Gold you should have to optimize your portfolio. One study went back to 1930, and the other to 1950. They both came up with similar numbers, being 20 to 30% of your wealth should be in Gold.
- Finally, Gold will lead the race and be less volatile, but little brother Silver will eventually outpace Gold in performance. I recommend having both metals in your portfolio; depending on your risk profile and objectives, I can help you with the proper allocation.
I firmly believe Gold and Silver will appreciate over the next decade, and I hope you participate with me. It may be life-changing profits, as many bullion experts worldwide are forecasting.
Please watch Mike Maloney’s recent video to validate my thoughts and gain his insights:
Bill Westmacott is an educator, a life insurance broker and a wealth solutions provider.