The TreeceCo Report
By Tony Treece
What a week it’s been for precious metals! The prices suppression continues, and just this week UBS, an investment bank, agreed to pay a fine for manipulating the price of metals. According to Reuters, “Switzerland’s financial watchdog said on Wednesday it had found a ‘clear attempt’ to manipulate precious metals price benchmarks during a cross-market investigation into trading at UBS bank.”
We’ve been saying it for a while now… What meets the eye is not always the case, and here’s the proof. Further, these hiccups along the way should not bother long-term savers like many of our clients. The only folks who lose sleep at night over the prices of precious metals are those looking to make a quick buck by trading metals.
But it gets better… You’ve heard of Fidelity Investments, right? They are one of the world’s largest mutual fund investment firms. Joe Wickwire, a research analyst and portfolio manager for the company, declared, “From an assets allocation standpoint, actual gold market fundamentals are not linked to transitory U.S. stock market volatility or whether or not the dollar moves up or down against the euro or the yen. Those items can be the basis for short-term trading strategies but not for long-term portfolio construction. I believe that now is a good time to take advantage of negative short-term trading sentiment.”
What’s more, it’s estimated that 40% of mines cannot make a profit when gold is trading at $1,250, so eventually they will close up shop if prices remain suppressed. Therefore, if you are holding metals it’s a win win situation because the demand would have to go up if 40% of gold mining companies ceased to exist.
The dawn of a new horizon for precious metals is shining through when mutual fund companies are advising their clients to buy physical precious metals. Shuck off the milquetoast precious metals mentality because now is the time to buy while we are at historic lows.
To prove the point further, Reuters reported on November 5th, “The U.S. Mint said on Wednesday it has temporarily sold out of its American Eagle silver bullion coins following ‘tremendous’ demand in the past several weeks.” Currently we are still delayed on our Silver Eagles shipments, and most all silver products are backordered. We are accepting orders at these prices, but there is a delay for delivery.
If you have already purchased metals, be encouraged that you are ahead of the curve, and you are sitting nicely. The only thing I would ask myself is, “Do I have the ability to leverage up and buy more gold and silver?”