Buying the Dip: Gold and Silver Prices During a Bull Market
It’s somewhat of a truism that buying low and selling high is the key to making investment gains. If only it were that easy. We unfortunately have only the benefit of hindsight, not foresight, when making our investment decisions. So while some investments may seem like no-brainers in retrospect, at the time we’re making our choices things aren’t quite as clear.
Looking back on the performance of precious metals in the aftermath of the 2008 crisis, many investors wonder why they didn’t take advantage of the opportunity to invest in gold and silver. They see that gold nearly tripled in price while silver more than quintupled, and they wonder why they didn’t get out of stocks and into precious metals.
Of course, at the time many investors thought the world was coming crashing down around them. They may have been shell-shocked, frozen by fear. And unfortunately all too many decided to get out of their investments at just the worst time, as markets reached their bottom.
But many investors also learned from their experiences in 2008, vowing never again to make the same mistakes they made back then. And many of them vowed to invest in precious metals the next time they thought markets were on the verge of a downturn.
One of the problems many investors have, however, is pulling the trigger on an investment. How do you know that the price of an asset is reasonable? How do you know that asset will make enough gains for it to be a worthwhile investment?
At the end of the day, you really don’t. Risk is inherent in all investing. All you can do is assess your individual situation and make the decision that is right for you.
Gold and Silver Prices Recently
Many investors are facing that dilemma nowadays when it comes to investing in precious metals like gold and silver. Gold and silver saw tremendous price growth since the beginning of last year, thanks to the economic effects of the lockdowns and the fear surrounding the economy and the recession.
But neither gold nor silver prices have seen much retrenchment since then. Despite the fact that stock markets have gone on to set record highs, thanks to the Federal Reserve’s $4 trillion in stimulus, gold and silver have remained relatively steady in the $1,800 and $25 range, respectively.
That changed significantly recently in a so-called “flash crash” earlier this week that saw gold tumble to under $1,700 as a result of massive selling, with over $4 billion of contracts being sold. But the crash was over almost as quickly as it happened, leading to speculation that someone was trying to take advantage of thin trading volume and slow summer investment activity to push the gold price down and take advantage of the price drop.
Regardless of the reason for the flash crash, it provided an opportunity for those hesitant to buy gold and silver to get into precious metals by buying the dip. It was just a few years ago that gold was at about $1,200 an ounce and silver was at $14 an ounce. So to anyone who remembers those prices, gold at $1,800 and silver at $25 seems expensive in comparison, hence the hesitation when it comes to investing in gold and silver.
But what if you knew that gold would hit $2,400 next year, and that silver would hit $36 an ounce? Wouldn’t you invest in gold and silver today, knowing that you could make great gains in the future? Of course you would. So the question you want to ask yourself is, how high will gold and silver prices get and when?
The Outlook for Gold and Silver
With inflation high and potentially rising even higher in the future, millions of Americans out of work, and the federal government set to spend further trillions of dollars, the future of the US economy doesn’t look very strong. Stock markets have become almost completely reliant on Federal Reserve stimulus for their performance, and with the Fed talking about tapering, the end of the bull market for stocks could be near.
The worse the outlook for the economy, however, the better the outlook for gold and silver. Remember their performance during the aftermath of the 2008 financial crisis. And during the stagflation of the 1970s, both gold and silver saw annualized growth of over 30% for the decade. That’s the kind of growth that investors would kill to have today.
If you’re bearish on the US economy and think markets are overdue for a correction or even a major crash, you may want to start thinking about investing in gold and silver. Their potential for growth could protect you in the event that markets turn south.
Investing in gold and silver doesn’t have to be difficult either. And you can invest in gold and silver even if you don’t have readily available cash. If you have retirement accounts such as a 401(k), 403(b), TSP, IRA, or similar account, you can roll over or transfer funds from those existing accounts into a gold IRA or silver IRA. That allows you to benefit from owning physical gold or silver coins while maintaining the same tax advantages you already enjoy from your retirement accounts.
Of course, if you don’t want to wait to take a distribution of physical coins from your precious metals IRA, you can also make direct purchases of gold or silver coins. With established relationships with mints around the world and dozens of possible choices, Goldco has gold and silver coins to suit anyone’s needs, along with a guarantee of authenticity.
The recent pullback in gold and silver prices could be one of the last opportunities for you to buy gold and silver before precious metals continue their bull run. Don’t be left behind wishing you had bought gold and silver before they continued climbing in value. Talk to a precious metals expert at Goldco today to learn more about the opportunities you have to buy gold and silver.