Gold bullion bars are pictured after being inspected and polished at the ABC Refinery in Sydney on … [+]
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The recent fall in gold and silver prices could present a buying opportunity for those wishing to invest in precious metals for the medium and longer term.
The drop “sent a little bit of shock to the blind bulls that were only seeing the gold price and silver price rising forever,” says Jeff Christian, managing partner of New York-based commodities consulting company CPM Group in a recent video.
But there is some good news for the bulls. This drop could present a suitable time to start buying for investors who are patient enough to hold their investment for a while, he says.
Precious Metals ETFs Take Deep Dive
Gold bullion prices have fallen from a high of $2,064 a troy ounce on August 6 to $1861 recently, according to data from Bloomberg. The SPDR Gold Shares exchange traded fund, which holds bars of solid bullion, followed the same decline.
Silver also dipped falling from $29 a troy ounce on August 10 to $23 recently. The iShares Silver Trust ETF, which tracks the price of the white metal, followed a similar pattern.
There were many reasons for drop in prices, Christian explains. These include the recent strength in the U.S. dollar, political uncertainty in the U.S., and the worries that the Covid 19 pandemic could see a second wave that could be far worse than what has been seen already.
While those factors caused investors to shun gold and other risky assets, the effect may only be temporary. Put another way, looking forward the upward trend in precious metals prices looks set to resume soon.
Precious Metals Headed Higher Over the Longer Term
“We’re looking at gold and silver from the perspective of next two months, four months, two years, 10 years,” Christian says. “And we think the gold and silver prices will recover and will rise sharply in the not too distant future and over the next five years.”
He calls it “something of a buying opportunity.”
In other words this is a buying opportunity for anyone who wants to increase their exposure to precious metals . Or put simply you can now buy gold for a couple of hundred dollars an ounce cheaper than you could a few weeks ago. The story is similar for silver prices.
Source: Forbes – Money
