Silver Values

It is an old saw in precious metals trading. Sell in May and Go Away. That was the traditional wisdom, and I even saw it repeated during the dip a couple of weeks ago. However, if you are still holding your stash, you may want to rethink that traditional wisdom this year.

James Turk says that the logic does work about 75% to 85% percent of the time. It works most of the time, but that does not, as he admits, work all of the time. In general, the 1st and 4th quarter are stronger, while the 2nd and 3rd quarter are softer. Now we did reach a peak in March which would conform to the logic, but we are net getting a clear pattern of any sort of bullish market yet. In fact, so far this year, a sale in March and repurchase in April would have been a great strategy. But if you, like me, missed the March boat, keep your eye out for the next one.

A weaker dollar, more expensive oil, and a stream of financial problems are supporting the price of your shiny stuff. Do Your Own Due Dilligence, but if you can hold onto your silver and gold this summer, consider it strongly, despite conventional wisdom.  A gold or silver sale in May, may just be a sale you regret by July.

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Is the Dollar Better Now?  

We keep looking for signs that the value of our good old US dollar is finding support, and maybe even rising. In such a case, it might be time to put our silver and gold investment on the back burner again, and jump into more “normal” investments.

 In other words, maybe we should just keep a small percentage of our savings in PMs like silver and gold as a hedge for the future, and go about our business as usual. However, many experts tell us that despite the way the news and government downplay the facts, we are not anything like close to being back to business as usual.

How Much Should A Person Save in PMs?

Most advisors will say to only put a fraction of savings into precious metals anyway. They tell us to allocate 10 to 15 percent of our savings into gold, silver, platinum, or palladium because of the value as a hedge against inflation.

 Gold and Silver Bugs, or those that would rather put 85% of their savings into PMs, and maybe keep 15% as liquid cash think differently. They see PMs like gold and silver as the standard around which the dollar fluctuates, and not the other way around. These savers are all about hedging. Of course, in the last several months they have seen a great return on their PM investment, though historically the stock market indexes performed much better.

Most of us, who do appreciate the ability of PMs like gold and silver to retain some value no matter what happens, or maybe just like having a very shiny stack that goes “clink”, probably fall somewhere in between the true gold bug and the standard investment advice. And of course, we do watch the market and try to adjust accordingly.

Seeking Alpha is not seeing any signs that anything the fed has done will turn the tide on inflation in the near future.  In fact, the recent drop in gold and silver prices may be a time to look for some physical PM deals. If you have some extra cash, or an investment that is not doing very well right now, and you know you can afford to wait before you cash in any precious metals you buy with that investment, look around to see what you can buy.

What did I do? Well, I could not resist picking up a Gold American Eagle yesterday (GAE). I found a deal, a bit over spot but under the posted PCGS price for the MS69 GAE. I think gold may be losing its shine for some fair weather friends, and they are raising cash for other uses. I did spend money I could afford to “wait for”, and I did shop around for a purchase that I thought was a good purchase.

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