One of the great frustrations of covering the precious metals markets day in, day out, for weeks and months and years at a time, is figuring out when to highlight short-term price movements in gold and silver.
Short-term, sharp drops in price are easy. They’re the one-foot putt, the empty-net goal, the gift-wrapped-on-a-silver-platter handout gift from the market to any investor unemotional and forward-thinking enough to take advantage of them.
In fact, my favourite market day of the past year was August 15, 2018 when silver fell over 4% in a day. In the span of several hours, it went from over $15/oz. to $14.39/oz. An investor who managed to cost average $£€300 a month into a growing silver position suddenly found themselves able to buy nearly an entire extra ounce than they could the previous day.
We sent out an alert that day to make sure all of our newsletter subscribers knew about his opportunity. Many of you capitalised on it, and silver recently rallied over $16/oz.
The Big Queasy: Buying at Near-Term Highs
Which brings me to my next point: Discussing short-term price rises is much trickier. We recently sent out another alert as silver was hitting multi-month highs and gold was as well, breaking above $1,340/oz.
We feel it’s our duty to keep you apprised of newsworthy price movements in gold and silver, but it is much more difficult to get genuinely excited about buying at near-term price highs than it is at multi-month lows.
Still, the savvy investor doesn’t stop buying when prices rise. The patient, shrewd, $dollar/£pound/€euro-cost-averager now finds that his $£€300 buys two full fewer ounces than during the August 2018 sell-off. By purchasing the same $£€ amount each month, he or she automatically buys more when prices are low, and automatically buys less when prices are higher, systematically and automatically lowering their average cost over time.
Since we sent our most recent alert on February 20, gold and silver have done little but fall. Gold is back down to $1,288/oz. and silver has fallen to $15.13/oz. Which, you guessed it, we’re pretty happy about.
The sharp investor never stops buying…
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