January 21, 2010 by PreciousMetalInvestment.com
The stock market has taken a substantial fall in the last two days. The question is whether this is due to the dawning realization by investors that they have been living in a fantasy world.
A world where governments can spend tax payers money in advance and play catch up with the printing presses in order to cure their economic ills to the instant benefit of all. Maybe tomorrow normal service will be resumed and optimism, however misplaced, will return for a few more weeks or months fuelled by the lies and misrepresentations of our leaders and their minions.
But every cloud has a silver lining as physical gold-bullish-news/”>gold and silver together with their producers have been caught up in this stock market fall. This presents a great opportunity, perhaps the last for a while, to top up on silver & gold, the two very precious metals that can realize their profit potential to our benefit in these very troubled times.
Whether stocks in general fall or rise in the short or long term, the outlook for gold and silver as a hedge against inflation, store of value etc.,etc., is looking better almost day by day!
Short of cash or not entirely convinced then look at the silver July $20 call for iShares Silver Trust (SLVGS). We have just bought contracts at $0.95 which looks to us a bargain given all the bad news around and the temporary hardening of the dollar because the Euro, the Cable and others are looking just about as sickly.
China may or not be a bubble about to burst, we do not know but are they going to unload their gold in preference to their dollars? We think not!
India is reported to be likely to increase substantially its gold purchases as they get used to the higher prices and scrap recycling is drying up. There is no sign of their traditional feelings for the metal being eroded. It is/was more getting used to the new price plateau reached in 2009. It is probable that they will have to get familiar with substantially higher prices by the time the next wedding season arrives in August.
Tomorrow may bring an even better opportunity to get in on gold and silver but those option prices look to good to miss out on right now. In case of any doubt we are not including Platinum and other PGMs in this recommendation. Our earlier article explains why.
Stick to silver and gold.