Take a Look at the Gold and Silver Bull Market!

A picture is worth a thousand words!

The gold bull market has outperformed both stocks and fixed income indices for the past two years.  And the silver story in one word:  Wow!

As we write these observations, spot gold is $2,673.  

Here is a chart showing the history of gold prices on the Chicago Mercantile Exchange during that two-year period. It reflects a move of about 65 percent.  

It’s not hard to understand what is driving the gold market.  The highest inflation in 40 years has added to gold’s luster, not to mention Wahington’s blow-off spending and devil-may-care debt.  But it is not just domestic concerns behind the bull market.  There are global dynamics.

The turn to gold and the move by foreign central banks to de-dollarize their reserves clearly demonstrates that we are entering a new global order.  The world realizes that the dollar is not just a monetary risk, it is a political risk as well.  With that in mind we continue to warn you that global de-dollarization is still in its early stages.  It will continue to eat into the dollar’s purchasing power and do great damage to the American standard of living.

That brings us to a discussion of war.  We appear to have inched much closer to a global nightmare.  Although the mainstream media remains impervious to reality – as usual – the best-informed sources report that we are in the riskiest position we have been in since the Cuban Missile Crisis in 1962.

Spot silver as we write is $31.98.   It’s high this year is $32.63.   

Silver typically lags the gold market.  That happens in the early stages of the bull market.  But when silver, which is by nature more volatile, gets going it often outperforms gold itself, often dramatically!  

Here is a two-year silver chart from the CME.  It reflects a move of 75 percent over the two-year period.  To repeat ourselves:  Wow!  75 percent!

But take note of this.  Even with its dramatic climb over the past two years, silver is still far below its all-time highs of $50 per ounce.  Stated differently, the opportunities in silver, like gold, remain substantial.

One last picture to clarify where we are headed.  Here is a long-term gold chart, beginning in 1970, just a few months before President Nixon repudiated America’s promise to redeem its paper money with gold.

 The long-term consequences continue to unfold and will do so until at last the irredeemable US paper dollar is nothing but a historical curiosity.

A 50+ year trend!

GOLD FROM BEGINNING OF 1970 UNTIL NOW