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Gold and silver have reached remarkable highs, with gold breaking through $4,000 and silver nearing $50, marking new all-time price records as of this week. Forecasting remains challenging, with analysts believing gold could push toward $5,000 before experiencing significant corrections, but sentiment is far from the euphoric “manic” phase that marks the end of a bull market.
Let’s take a look at where prices stand as of Wednesday, October 8:
The price of gold is up at $4,041.59 at a new all-time high. Gold is about to breach our target price of $4,050.
The price of silver is at $49.58, just pennies away from closing in on the fabled $50 level as of recording.
Looking over at the paper markets…
The US dollar index is up at 98.61, flirting with 99 as of recording.
Where Will Gold Go From Here?
The remarkable rally in gold and silver has prompted fresh questions around buy, hold, or sell decisions. The optimal path depends on unique personal circumstances, risk tolerance, and long-term objectives—but historical precedent, current market psychology, and the macroeconomic landscape suggest precious metals will remain a cornerstone for protection and growth in the stormy seas ahead.
Why Buy Precious Metals Now?
Buying at record highs may feel uncomfortable, but current moves are driven by underlying factors: government debt, uncharted territory in equities, and gold reclaiming its role as the top hedge asset for central banks globally.
The international shift away from the dollar and toward gold is especially notable, reinforcing gold’s value as a long-term, anti-inflation store of wealth. Physical gold and select collectible coins can, at present, be purchased at premiums lower than modern bullion—an unusual value opportunity.
Investor psychology is shifting: people are increasingly motivated to “get on board” regardless of price as faith in the dollar wanes. Buying makes sense for those seeking wealth preservation, protection against inflation, or to diversify away from dollar-denominated assets.
Why Hold Precious Metals Now?
Holding remains the preferred posture for long-term wealth preservers. Gold has historically averaged a 9% annual return over decades, mostly due to the dollar’s declining purchasing power. For those whose motivations center on asset protection, family legacy, or “immunity” to cost-of-living increases, the advice is unchanged: don’t be lured by the temptation to trade—stay the course.
Bear in mind, maintaining a balanced portfolio is key. If precious metals have grown to dominate the portfolio (e.g., 60% or more), some rebalancing may be prudent—but never reduce core holdings below 25-30%, due to ongoing fiscal and monetary instability.
Why Sell Precious Metals Now?
Selling precious metals may be appropriate in several cases:
- Liquidity needs: If personal circumstances necessitate cash, selling is justified.
- Portfolio rebalancing: When metals have greatly outperformed, trimming back to intended target allocations can realize profits and reduce risk.
- White Metal Fatigue: Some investors who have held since prior cyclical highs may simply wish to exit after years of waiting, particularly in markets like silver and platinum.
However, speculative trading—selling with the hope of buying back at a lower price—can be dangerous, given that missed re-entries are a common pitfall. Physical market spreads remain substantial (often 10-15%), making short-term trades less attractive than traditional investments.
Our Advice to Precious Metals Investors
We advocate for a personalized, needs-based approach: understand your purpose for owning metals, set clear target allocations, and avoid emotional responses to price movements. Ounce-compounding through ratio trades is only recommended when premiums and ratios support value-adding moves—a condition not met at present. The strategy is one of patience, ongoing education, and building a legacy, not chasing short-term swings.
For those just entering, periodic, disciplined buying (dollar-cost averaging) remains a sound strategy; for established holders, resist the temptation to “trade” one’s insurance policy for fiat gains.
Get In Touch
What’s your ideal strategy for precious metals investing? Our team of expert advisors are here to help you determine your goals and set clear target allocations. We’re happy to discuss your personal objectives and help you create a precious metals investment strategy on a complimentary, no-obligation consultation. Please reach out to us at 800-525-9556.
