How Good is Gold?

 It took two months to drop $100.00 with some tough battles along the way. Then, when what everyone expected was occurring was reported to be occurring, she jumped up $102.00 in just 6 days from a treacherous low of $1,662.00 on September 28th, to a nice rally point at $1,725.00 on October 4th. With a little profit taking, the yellow metal settled out the week at $1,686.00. A firm rung to hang on to during these volatile times. GMRgold has long advocated that each American become their own Central Bank. 

The Central Banks of the World think and act in Macro thoughts and maneuvers. In their battle against inflation, Central Banks are tightening money with rising interest rates, and not surprisingly, adding gold to their coiffeurs. The central banks began a buying spree in 2010 which continues with increasing momentum today. The Central banks were net sellers of gold before that time, selling roughly 4,426 MT of gold between 2000 and 2009. But for more than a decade now, they’ve been net buyers, and in 2022 central bank gold reserves are at their highest level since 1990, according to data provided by the World Gold Council (WGC). Most recently, It’s worth noting that in 2021, central banks added to their holdings, marking a significant turnaround in demand after the decade low experienced the year prior. Central banks are expected to continue their net gold-buying streak this year. According to a 2022 central bank survey from the WGC, 25 percent of respondents have plans to increase their gold reserves, up from 21 percent in 2021.

Why do Central Banks Buy Gold?

Their most important task is to provide price stability to their national currency while preventing a banking system collapse. This is achieved through controlling inflation — although as the present global economic crisis has shown, sometimes the fate of a country’s currency may be difficult for a national bank to control.  As the Dutch Central Bank explainsA bar of gold always keeps its value. Crisis or not. That gives a safe feeling. The gold holdings of a central bank are therefore a beacon of confidence.” 

How Good is Silver?

Silver not only followed the “jet wash” that Gold provided, it decided to overachieve. Opening the week at a crucial level of $19.03, it too rallied to a recent high of $21.14 before settling out on Friday at $20.14. Every syllable of analysis about silver in the past weeks rings just as true today. One precious metals analyst last week commented that he was a buyer all the way to $30.00 and when it dips, he would double up to average down. It is important to keep in mind that premiums are at an all-time high for the physical metal.  There seems to be no shell shock for buyers even with the exorbitant percentage above the spot price indicating that the true acceptable value is much higher. The electronic spot price and the SLV at some point will have to correct to the north which will be the signal that the long-awaited breakout has begun. It is a teetering point currently for the physical price to outrun the spot price by this large of a margin.

More and more precious metals enthusiasts have either begun to diversify with numismatic Gold and Silver coins, or just switch altogether to the misunderstood segment of the precious metals universe. With the premiums on bullion what they are, it has eliminated the normal difference of the cost to own between the two. This makes the experiment more palatable for those that are new to Certified and Graded Antique Gold and Silver Coins.  Many will learn the remarkable benefits of a form of metals investing that is largely insulated from the volatile swings in the spot prices of the commodities market. Numismatic Coins only recognize that a sustained Bull Market is occurring and performs largely independent of what the profit takers on Wall Street do to the speculative markets. Benefitting from upward movements while not following corrections in lock step. Your GMRgold representative is available for a consultation to understand better the benefits of both Bullion and Numismatic components in your portfolio. 

Protect Your Portfolio

If you are looking for a safe investment that will hold its value even in times of high inflation, precious metals may be the answer for you. Check out our FREE eBook to learn more about using precious metals as a hedge against inflation. Our team at GMRgold can help you get started with your investments and provide guidance along the way.

GMRgold was created to serve as a safe and stable diversification partner when buying, selling, and trading gold, silver, platinum, and palladium. Let us advise you on new products, portfolio diversification, IRA and 401(k) options, valuation of your collection, and other matters related to the precious metals market. Call us today at 877-795-9585 or fill out our online contact form to learn more about our solid solutions using precious metals to diversify your portfolio.