It is this bloggers opinion that precious metals are VERY UNDER PRICED. If I get into the reasons why I believe they are beyond what I am telling you in this post, I might as well write a book about it. I've been comparing prices of bullion... Gold, Silver, Platinum, Palladium... Against not only eBay, but Amazon, as well as directly with the refineries that sell their bullion products.
As to be expected, the larger the bullion unit (in terms of troy weight or grams) the cheaper the premium... But.... I am noticing that bullion is selling on open auction on eBay for 10% and 20% above melt value. This can only mean one thing: There is an artificial suppression on the market price. Equilibrium of market supply and demand prices gold at around $50 a gram, but spot (melt) price is barely $41 a gram as of this writing. It doesn't sound like much but with 31 grams to the troy ounce, it is equivalent to losing 15 ounces of silver for every ounce of gold you buy at that rate!
But...
There is little choice for precious metals to go up for several reasons. Even though it feels wrong to buy bullion above melt value by such large amounts, you have to remember that A. not more than a year or two ago gold and silver were at record levels which are FAR above the prices now on bullion, and B. You cannot infinitely print paper money AND have prices drop at the same time. Not for very long. They might be able to continue the manipulation for months or years, but after a few years their hold on the prices will break down and there is no problem for me to believe the prices will shoot up sharply and quickly.
Please keep in mind, you don't buy bullion for short term profits. The actual purchasing power of gold and silver remain the same if you adjust for manipulation and all the crooked stuff going on. It's not the value of metals you are betting on. It is the worth of the money that changes. I don't care what the price is doing, I know metal is desirable when the alternative to metal is paper. Now might be the cheapest you will ever be able to obtain metals for. Yes, it breaks my heart I missed buying boatloads of silver at $4 an ounce in 2003. I knew it was going to go up, but I assumed I had time. Not enough time though. I was too late. The indications are, silver may not drop below $15 an ounce. If they do, it will be because of manipulation and panic, but prices will sharply rise soon afterwards due to all the buying pressure from everyone trying to corner the market. Can you imagine the stampede if all of a sudden a store put up a sign that said "iPhone's on sale now! $25!"... That's what will happen if precious metals drop to a certain point. Everyone knows the dollar loses value every day. The question is what are you doing about it?
I just want to give my readers the insight to protect your future. You remember how hard you were hit when the bottom fell out of the markets not that many years ago? Those who had their retirement in stocks pretty much were doomed to work well into their old age and forgo retirement. I know some people who fall into this category. On the other hand, if you managed to put it into precious metals, you did quite well. Paper wealth will always be manipulated. Real wealth cannot itself be tampered with. The extent of it's manipulation begins and ends with paper. With that said, always take delivery of the metals you own. Never settle for a paper saying you own x amount of metal in y repository. And should you acquire large amounts of the metal, do NOT let people know who have no business knowing. I know it is a genuine concern, but a large value of gold is such a small volume of material, easily concealed. You can even go so far as to bury it, just be sure to remember where.
With the real market keeping pace far above the official values, I would say we are overdue for a market correction very soon. Just keep watching. If you have anything sitting in a savings account drawing 1% interest per year or less, please remember that inflation is several times that amount, so you are actually losing wealth at the same time you think you are gaining money, and that precious metals tend to outperform inflation!
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