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The Silver Shortage, Gold Prices, and More

February 2, 2013

Listen to veteran precious metals advisor Tom Cloud as he explains what lies ahead for gold, silver, and palladium prices. Tom also discusses the physical silver shortage and how it affects silver prices moving forward.


    Gold News

    – The FOMC met this week and said they must keep the $85 billion per month bond purchase plan in place. Plus, they said that they will need another $1.4 trillion in 2014.
    Gold has reacted favorably to the FOMC news and is now over $1680/oz
    – The Treasury bill auction of $29 billion worth of the new 7-year debt took place, and the debt sold at about 1.42%, which is higher than the Treasury had hoped.
    – We are starting to see a top in the bond market, where people will move out of bonds, and those who do not move to the stock market will move toward gold.
    – I feel we are nearing a 45-day period during which we will see a breakout in gold as the debt ceiling issue comes nearer, plus the Federal Reserve continuing the quantitative easing.
    Inflation looks like it might be creeping up in the near future as well.
    – For the month of January, the price of gold was up 1.5%.

    Silver News

    – The silver shortage I’ve been talking about for weeks is affecting the price of silver, which was up 7% for January. The silver shortage is getting worse by the day.
    – I had the largest month for average silver sales in January.
    – I believe we will see money managers across the board increase their recommended percentages in precious metals this year.
    – I also think a host of new buyers will enter the precious metals market
    – Volatility is not going to go away, but more and more people are realizing the need for hard assets and governments are seizing opportunities to purchase precious metals.

    How Interest Rates Will Affect Precious Metals

    – There is a common misconception about interest rates: The Federal Reserve has announced that it is not raising rates through 2014. This rate the Fed is referring to is the rate they charge member banks to borrow funds. Individuals’ rates are decided in the markets, not by the Fed. Interest rates are expected to rise as all this new money is created. As rates rise, the bond market gets hurt, and to some extent, the stock market.
    – Don’t believe for a minute that interest rates won’t change for the next two years.
    – If you have numismatic coins, you might want to seriously consider getting those exchanged for bullion. Many of the numismatic coins have dramatically underperformed bullion over the last several years.

    Palladium News

    – Palladium Update: the price was $566 in November. Now the price of palladium is $750, with plenty of upside potential.
    – This is great news for all those investors who were patient and waited for the price to finally increase.

Gold Investor's Kit from Tom Cloud


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