Why You Should Top off Your Gold And Silver Holdings before Labor Day
The comments below are an edited and abridged synopsis of an article by David Smith
Metals and miners have a seasonal tendency to decline in mid to late June and make a secondary—often slightly higher low—in the late July to mid-August period.
Usually by mid-August (at the latest), the metals and miners have begun to strengthen, with bid-ask spreads tightening and upside volume building strength as Labor Day approaches.
Many market participants hold off adding to their stock holdings, and more importantly physical gold and silver, until after Labor Day when market movement offers proof of what has just taken place.
This means that those who wait end up paying more for their metal and also get stuck with higher premiums. In many cases, availability becomes questionable. If you are planning to top off your stash anyway, why wait?
Several analysts have talked about this scenario with startling implications about what may lie just ahead; Smith includes quotes from Adam Hamilton, Craig Hemke, Ronald-Peter Stoferle and Michael Oliver.
Their projected prices for gold and silver during this timeframe is off the charts, and most people today probably scoff at the thought.
Many people defer buying gold and silver because they incorrectly see it as a consumption purchase of something like a boat or a lawn mower. What you’re actually accomplishing is exchanging an inferior form of fiat money (currency) for a superior form of money that has withstood the test of time.
Unlike virtually all paper currencies in history, gold and silver have never gone to zero. Since the US went off the gold standard in 1971, the dollar has lost almost all of its purchasing power.
And unlike the boat or lawn mower—which depreciate as soon as you take them home—the metal retains its value, and over time tends to increase in value.
If there was ever a time when this double-kicker effect of insurance and profit potential is likely to move into hyperdrive to the upside, the coming months and next few years has got to be it.
This Labor Day may bring a financial quake that catches everyone by surprise, developing, in the words of Hemingway about how bankruptcy takes place, ‘gradually, then suddenly.’