Last March when metals tanked only to come back with a vengeance?
The recent drop in precious metals price is blamed on an expectation of a weak economy. Is that such a big surprise? Already gold and platinum are coming back strong. Lockdowns are likely to continue. Joe Biden will bring with him higher taxes and more regulations.
Why is that a surprise?
The dollar firmed, most likely temporarily. Ten-year bond rates are up to 1.16%.
I don't know about you but that does not get me excited. The dollar is destined to lose value in 2021 as the money supply grows and more stimulus is pumped into the economy.
Did you know that over 23% of ALL currency printed was printed last year alone?! That is about the same percentage gold went up in 2020.
If you think investors are not anxious to find alternatives to the dollar and stocks just look at what happened with Bitcoin. Bitcoin more than doubled from just under $19,000 to almost $42,000 in less than a month. Profit taking has brought it back to the mid $30,000’s, but that’s still spectacular. 
Some have speculated that Bitcoin has replaced gold as a safe haven. I think it especially appeals to younger investors. There is no doubt that people are moving to Bitcoin for many of the same reasons that investors move into gold. But many more are buying physical gold and I think we are just starting to see the influx of cash going into gold. Interestingly, over half of my sales are to first time precious metals buyers and that tells me a lot about what is happening. It is a very good sign that gold is likely starting a nice upward moving market with real support from new buyers. These people want to hold physical metals. The way big government and big tech manipulate the web already makes me wonder what they can do to steal our digital money (Bitcoin) if an “emergency” arrives.
Already this year we are seeing some of the same signs we saw last year before gold moved up dramatically. Premiums are rising. Delivery is delayed on many items.
I am buying. Unfortunately, most people wait until the metals are running and jump in after they have risen. As long as gold is under $2000 there seems to be a wait and see attitude. It was the same last year when gold initially dipped below $1500 before starting its move higher to over $2000 an ounce.
Don’t wait and pay higher prices. Gold could certainly make a move like Bitcoin if conditions get worse in the economy or world stage. China is basically ignoring Joe Biden. Kim Jong-un is now doubling down on his nuclear goals. He wants to get Biden to the negotiating table to reduce sanctions and will use provocation to do it. I am betting that Biden will be much more likely to give in.
Gold and silver just look to be repeating what happened last year when there was an initial rush to cash (just like now) as people were not sure what to do and they wanted liquidity by going into cash. Seems like Deja vu all over again as Yogi Barra would say.
I am also loading up on platinum. It is THE most undervalued metal. Even today with platinum down over $30 since last week the price is holding well over $1000 an ounce.
Yes, I know I have been saying that for several years. Well, I guess I have been too early to that party. But I was early to buy palladium at $700 4 years ago. It is now $2400. I was early to recommend rhodium at $1100. It fell to $700 but is now $20,000 an ounce.
So, the wait was worth it. I believe platinum is next.
Look, no one knows what the future holds. Do you really think having the change in leadership in Washington is going to make things better? The spending will continue. With no checks and balances in government it could lead to some wild policies getting passed which will be bad for the dollar. Most likely, spending by the government is going to accelerate at an even greater pace. That means a depreciating dollar, more debt and no way out.
So, we may have missed Bitcoin. I did. But I just cannot buy a piece of air for $40k.
I would rather own metals I can lay my hands on when I need them. Do not get me wrong, I wish I bought Bitcoin at $4000 when one of my very astute clients told me to. I don’t want to say the same thing about gold after it moves up. I like physical metals that I can hold. I lose track of stuff that only exists on my computer and phone. 

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  • Nick Grovich