In today’s Mail Bag comes a timely question from Andrew about buying silver and gold. It is a question that I suspect many are thinking about right now for a range of reasons. The answer, as is often the case, depends on perspectives.
I see a lot of news about gold and silver in the news right now with prices being at record highs. Is it a good time to buy? What do you think?
First Andrew, a disclaimer. I’m not a financial advisor so what I express below is my opinion and not necessarily financial advise. You should seek an advisor prior to making any bullion purchases to make sure it meets your financial goals.
Now, that out of the way and the lawyers will be happy, it isn’t exactly the best time to buy silver or gold. Spot prices for both metals have been at record highs these past few weeks as more people have been buying these metals to add to their portfolio. The same has been true for Platinum and Palladium too. Much of this has been driven by a reaction to the COVID-19 pandemic with the thought being that, no matter the status of a particular economy, silver and gold will always be salable.
If you were to go and buy bullion today, it is likely going to be at a top price. That said, if you are simply wanting to insulate your financials by adding bullion for “emergency purposes”, buying now really isn’t going to matter much to be honest. In an absolute worst case scenario and we see national or global economies collapse, you probably aren’t going to be too worried on your profit margin on the bullion you bought.
If however you are buying to augment your portfolio with the hopes of buying bullion then selling it for a profit later, it’s not a great time. You are buying at or near the top of the market and, just like a house, you don’t have a lot of room up – but you have shedloads of room to fall! Realistically, the window to buy bullion in this scenario has somewhat closed. The best time would have been back in March when the COVID-19 pandemic was really just ramping up. Take a look at these two six months charts from APMEX on the spot price of gold and silver over the past six months.
I’m not suggesting that you shouldn’t buy bullion right now. Again, talk to a financial advisor. But you will be paying more of a premium now than you would have back in March. How tolerable that is depends on you and what your motivations are for buying.
Thanks for writing in Andrew. For those of you who have a question for the Mail Bag, drop a note to me using the contact form on the About page.