Segment 1: Volatility is Not Your Greatest Risk SEGMENT BEGINS AT 00:37 It really doesn’t matter where you look – sharp market losses abound right now. Economist and best-selling author Jerry Robinson dives into the wild markets and offers a positive view...
Gold prices got massacred on Friday.
Many investors are blaming the European Central Bank’s handling of the Cyprus situation, especially the latest news that Cyprus may need to sell off its gold holdings to justify its massive bailout. This move has precious metals spooked as it could be a foreshadowing of things to come. After all, Cyprus appears to be a template for the globalists who are always looking for innovative ways of draining the commoners of their wealth. What if other nations are required to sell off their gold holdings to finance their bailouts? These massive sales from the government stockpiles could flood the gold market with fresh supplies and harm the 11 year bull market in the yellow metal.
Without a doubt, this is one of the primary reasons why some investors got spooked this week and liquidated their gold holdings.
Two Year Price of Gold Chart
As you can see from the chart above, I believe that the key level to watch next week is near the $1478 area. If gold happens to close below that level, the selling could intensify. However, there are plenty of reasons why gold prices should strengthen in the coming days. (Listen to my interview with Tom Cloud above to hear these reasons.)
If you listen to the mainstream financial press, you are likely wondering whether you should be selling all of your gold and moving all of your money to stocks. I believe that this would be a big mistake.
Goldman Sachs, for example, is telling clients to liquidate their existing gold holdings and to even consider shorting gold.
European bank, Societe Generale, has also forecast that gold prices will end the year below $1400 and will continue lower in 2014.
Even some Asian banks are getting in on the bearish action by telling clients to sell their gold.
There’s only one problem with this logic… When the globe prints massive amounts of paper money, the price of hard assets goes up, not down, in the long-term.
– Meanwhile, central banks bought gold at the highest level in 50 years all throughout 2012. And they continue their buying pace in 2013.
– The U.S. Mint has more demand than supply for its Silver Eagle coins with up to a four week waiting period.
– Japan has committed to doubling its total money supply by 2014 while the Fed and other central banks continue to print money, which will drive up the price of hard assets.
– And we may be on the verge of another war in Asia-Pacific, which would send gold and silver skyrocketing.
The fundamentals are right for precious metals. While no one knows what will happen in the short-term, it is certain that the excessive global money supply will continue driving up the prices of hard assets, including gold.
Right now, precious metals investors must make up their minds. Are you simply a trader or are you in this for the long-term? If you believe that gold will continue rising over the long-term, then precious metals are “on sale” this week.
Want to learn more about investing in precious metals in the middle of the chaos that is unfolding in 2013? Watch our free precious metals investing webinar.