We’re Halfway Through 2017… Here’s What You Need to Know About Gold & Silver

Although both gold and silver were bullish in Q1 of 2017, the two precious metals have both dipped in the past few weeks. Even with these dips, we potentially foresee both gold and silver experiencing further growth in 2017.

These numbers reflect year to date (YTD) performance as of July 20, 2017.

Gold Still Holding It’s Own
Gold has taken a particularly wild ride this year, starting the year at $1,150 per ounce and almost reaching $1,300 per ounce twice, once in April and again in June. Gold then proceeded to drop in March, May, and July. Whereas gold has made a few dips already this year, July has been the first time gold started down on the month. In spite of this dramatic dip in early July, the yellow metal has still made roughly 7% gains on the year.

Compared to its performance in the weeks following the 2016 presidential election, gold has been recovering. On the whole, gold prices have had an inverse correlation with the strong U.S. dollar. Despite its strength against other currencies, the dollar is down roughly 7% on the year.

Silver’s Shift
Silver, on the other hand, is only up roughly 1% on the year. In early April, silver was the second best performing commodity and was up around 13% on the year. The British bank Barclays foresaw this decline, arguing in April, “Year-to-date, silver has returned 15%, assisted by a weaker dollar and weaker rates. Although silver may have some room to run, managed-money positioning has hit record levels, and this combined with price action, suggests that upside price momentum is stalling and silver could correct lower. We believe silver is likely to move lower from here, given the strength of the rally, the metal’s failure at key resistance levels of $18.40–18.60 [per ounce], and stretched positioning.”

Although purchasing has slowed down considerably in the summer months, prices have stayed roughly the same, even with a decline in demand. This is great news for precious metals, because it shows they are able to hold their value even when demand is low.

This drop in gold and silver prices is not unusual. According to data ASI has collected since 1975, summer is typically a slower market for gold. Furthermore, demand for precious metals tends to be lower when the U.S. stock market is stronger, which, since the 2016 presidential election, has been doing well on the whole.

Due to the stock market’s strength this year, many investors have been focusing their efforts on stocks as opposed to precious metals. Despite the profit to be found in the stock market currently, investors don’t want to lose sight of the true purpose of gold, which is to act as a hedge and help with long term growth. A company may go out of business, leaving the company’s stock worthless, but gold and silver have stood the test of time and are proven stores of value.

This is the perfect time to rebalance your portfolio. We suggest taking profits from the stock market and investing them in gold and silver while they are at their current lows—and before they potentially rise during the last half of the year.

Moving forward, financial gurus are predicting a positive second half for precious metals. Arguing for the growth of gold, in particular, FXStreet explains:

“We anticipate moderately higher gold prices this year and in 2018 based mostly on USD weakness, but expect tighter monetary policies and low inflation globally to create headwinds to rallies, a stop-and-go path.”

Silver is also forecasted to grow as a result of U.S. dollar weakness, and according to FXEmpire, “the market should continue to go higher, perhaps reaching towards the $16.50 level, as the U.S. dollar continues to get hit overall. …The market should continue to be a ‘buy on the dips’ situation, and…as long as we can stay above the $16 level, the market should continue to find plenty of bullish pressure. …The U.S. dollar will continue to get pummeled, and that perhaps the $15 level was going to be the ‘floor’ in the market. The market should continue to find both leveraged and unleveraged buyers, as the market continues to offer a safe haven from the U.S. dollar.”

We’ll be discussing palladium’s meteoric rise and platinum’s downfall in Thursday’s newsletter, so be sure to tune in to see how all four precious metals have been performing this year.

Use Low Prices to Your Advantage
If you’re considering investing in gold and silver while prices are still recovering from their dip at the beginning of July, here are the gold and silver investments you want to pay attention to. When we took a look back at our products this year, these gold and silver products were most popular among our clients for 2017—and for good reason. All of these products check off the major boxes for investors looking who are looking for high-quality bullion that you can buy and sell worldwide and, in some cases, provides great divisibility.

Gold

1. 1-ounce gold American Eagles—as low as Spot + $47 per ounce*
2. 1-ounce gold Canadian Maples—as low as Spot + $40 per ounce*
3. 1-ounce gold bars—as low as Spot + $33 per ounce*

Silver

1. 1-ounce silver American Eagles—as low as Spot + $2.50 per ounce*
   
2. 90% Junk Silver Bags—as low as Spot + $1.44 per ounce*
3. 1-ounce silver Austrian Philharmonics—as low as Spot + $1.99 per ounce*

To take advantage of short-term low gold and silver prices, call us at 800-831-0007 or email us. In the weeks following gold and silver’s plummet, we have seen their prices steadily making their way back up, and according to precious metals experts, both have significant growth potential for the remainder of 2017.

*Prices subject to change based on market fluctuation and product availability. Prices reflected are for cash, check, or bank wire. Offer expires Friday, August 4, 2017.