Why did gold rise on Monday? Although the media made no mention of it, the Bank of England added hundreds of millions to the money supply on Sunday, their version of QE3. The funds responded by buying gold.
I wish to re-state my view that gold and silver are in long-term bull markets that have not ended. My horizon is at least three to five more years. Gold will be a slam-dunk winner, soaring to at least $4,000 to $5,000 an ounce. I can’t guarantee it, but that is my view. Silver is much more “iffy”, and certainly more volatile. From its current ratio of 54:1 to gold, it may outperform gold, on a percentage basis, but then again, since a significant portion of its demand is industrial and the global economy could slow dramatically, silver may not keep up with gold. Diversify! Do not put all your eggs in one basket. It is better to give up some potential gain in order to avoid a large loss. I would sleep well at night with a portfolio based on physical gold, silver and platinum – and some well-researched mining shares. Keep some cash on the sidelines. The last thing you want to happen is to have to sell some of your metals portfolio in times like these, where you are dealing with a manufactured “correction.” Prices still could go lower from here, but probably not much lower, if at all.