Gold is one of the very few asset classes that has risen this year—but the price is still a far cry from the $5,000 to $10,000 levels he’s mentioned. Silver is worse; not only has it fallen this year, most miners can’t even make a profit at current prices.
Although gold and silver both experienced a bit of a dip this week, retail demand for physical products remained strong.
Last week saw the market lose yet another major producer to the COVID virus. The United States Mint, North America’s largest producer of gold and silver bullion products, announced the closure of its West Point, New York facility on Wednesday, due to concerns for their workers’ safety.
It came almost out of nowhere, a black swan event that engulfed the world. As everyone from citizens to governments scrambled to deal with COVID-19, the gold industry was impacted in unprecedented ways as well.
This past week was very positive for the precious metals. Not only were prices for both gold and silver up significantly, our industry has also had the chance to catch its collective breath following ‘March Madness’.
This week was a continuation of the ‘new normal’, which is anything but normal. COVID continues to complicate our work and personal lives, including the precious metals supply chain.
Given what’s happening in the markets, it’s time to look at the history of crashes in gold and silver. And just as important, to see what message we can glean about their recoveries.
I don’t generally comment on the markets unless I feel we’ve reached a critical point. My last communication with regards to the state of the market was back in September 2019 when I said that I believed we were entering the early stages of a precious metals bull market
Gold has been a safe haven for literally thousands of years. But how effective is it as a “hedge”?
COVID-19 continues to be the primary issue that is triggering extensive market volatility across the world. Every headline out of China seemingly sends equity markets immediately higher or lower, depending on analyst and algorithmic interpretation of how the news pertains to the spread of COVID-19 and its impact on the global economy.
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