Category: Market News

weekly updates on precious metals market

Market Update: Precious Metals React to Latest Employment Data

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The latest employment data certainly did not disappoint, sending waves through the financial sector, with a staggering rise of 311,000 compared to the expected 225,000. However, this impressive figure has been accompanied by a surprise increase in U.S. unemployment rates from 3.4% to 3.6%. This raises questions about the true state of the labor market, and investors are right to be wary.

As we highlighted earlier this week, the precious metals markets have been flirting with the $1,815 level, waiting for the right catalyst to spur a reversal. Today, that catalyst arrived in the form of risk aversion and increased safe haven demand, with gold surging 1.62% to $1864.70 and silver climbing 2.53% to $20.64. Against the backdrop of uncertainty and volatility in the financial sector, precious metals are once again demonstrating their value as a reliable store of wealth and a hedge against market turbulence. This is further supported by the downward shift in 2Y Treasury yield, which is down 45bps, which is the biggest 2-day drop since September 2008.

With the situation at SVB Financial and the ongoing concerns about the labor market, it’s clear that investors need to remain vigilant and stay alert to the risks posed by a rapidly changing global economy. Technically, the gold futures bulls and bears are now back on a level playing field, with both sides vying for control over the near-term outlook.

Bulls aim to close April futures above the strong resistance at $1,875.00, while bears seek to push prices below the solid technical support at $1,800.00. Currently, the first resistance level is at $1,850.00, followed by the March high of $1,864.40 (gold peaked at 1868.60 today). On the downside, the initial support is at the overnight low of $1,830.00, then at $1,825.00.

In terms of silver, the market sentiment is still bearish in the short-term. Prices have been steadily declining over the past five weeks. The silver bulls are aiming to push the May futures prices above the robust technical resistance level of $21.50. On the other hand, the bears are looking to drive the prices below the strong support level of $19.00. Currently, the initial resistance level is noted at $20.505 and then at $21.00 (Silver peaked at 20.90 today). In contrast, the next support is observed at the overnight low of $19.945, followed by $19.50.

Against the backdrop of heightened market uncertainty and rising risk aversion, precious metals remain a critical safe haven asset for investors looking to protect their wealth and mitigate risk. With the technical suggesting that both gold and silver are poised for further gains, savvy investors will be keeping a close eye on these markets and positioning themselves accordingly. Stay alert, stay informed, and stay ahead of the curve in these turbulent times.

All Updates and Market info are provided as a third party analysis and do not necessarily reflect the explicit views of GoldClub Direct LLC. and should not be construed as financial advice.

The gold market takes a hit: Powell warns of higher interest rates

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Busy week here at GoldClub Direct as we expect some price action! Federal Reserve Chair Jerome Powell issued a stern warning to US lawmakers today, stating that interest rates are likely to be higher than previously anticipated due to stronger-than-expected economic data.

In ‘hawkish’ prepared remarks for a hearing before the Senate Banking Committee, Powell cited a tight labor market, solid consumer spending, manufacturing production, and higher-than-expected inflation data as evidence that the ultimate level of interest rates will be higher than previously thought.

Powell warned that if these strong economic trends persist, the Fed could speed up its rate increases, which could cause further turbulence in the precious metals market. Powell noted the current situation is a combination of supply and demand issues, the war in Ukraine and further unknown resolution. He also acknowledged that getting inflation back down to the Fed’s 2% goal will be a a long and bumpy ride.

It is a good idea to proceed with caution in the current economic climate, as Powell’s warning suggests that the gold market could continue to be volatile in the weeks and months ahead. Markets will continue to monitor the situation as the testimony on U.S. monetary policy to Senate and House committees continues Tuesday and Wednesday.

These initial comments pressured gold prices down, with April Comex gold futures currently trading at $1,820.80, down 1.82% and Silver futures down 4.42% to $20.200 on the day. Solid support still exists for gold at $1,810.35 and the $1,800 price points and silver at 20.25 and $20.  Keep an eye out for any major reversals as the markets continues to digest the latest information.  A great buying opportunity may present itself to those looking to take advantage of the market dip in gold and silver!

While metals, crypto and stocks (S&P currently sitting at 3,997.08, down 1.27%) are all trending lower, predictably the dollar spot index and treasury yields rose higher.

Recap:
  • The US economy has continued to recover from the pandemic, with strong growth in GDP, employment, and consumer spending, but there are still challenges related to the pandemic, supply chain disruptions, and other factors.
  • Inflation has been higher than expected in recent months, driven by supply chain bottlenecks, strong demand, and other factors, but the Fed expects inflation to moderate over time as these factors ease.
  • The Fed has maintained its accommodative monetary policy stance, with interest rates near zero and asset purchases ongoing, but it is preparing to adjust policy as necessary to achieve its goals of maximum employment and stable prices.
  • The Fed’s outlook for the economy and inflation is still uncertain and there will likely be continued softening in the labor market to achieve 2% inflation.

Looking ahead, all eyes will be on the the Labor Department which is scheduled to release the February U.S. employment situation report Friday, which will include the highly anticipated non-farm payrolls component. Experts predict that the report will reveal an increase of 225,000 jobs, following an impressive rise of 517,000 in the January report.

All Updates and Market info are provided as a third party analysis and do not necessarily reflect the explicit views of GoldClub Direct LLC. and should not be construed as financial advice.

Working For The Weak-end: Market Outlook

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To wrap up the week in U.S. trading, both gold and silver prices weakened. Furthermore, outside market forces such as a higher U.S. dollar index and rising U.S. Treasury yields are also bearish for the metals market bulls. April gold closed at $1,817.10, down by $9.7, while March silver is down $.496 at $20.810.

The U.S. data point of the day on Friday was the personal income and outlays report for January, including its PCE price index component. As the Fed’s preferred inflation measure, the annual core PCE price index, accelerated in January to 4.7%, above expectations of 4.4%. This macroeconomic outlook has led to concerns about gold’s vulnerability in the short term, with indications of a potential further drop if it falls below $1,800 per ounce. As noted yesterday, there is strong resistance indications at $1,780. However, geopolitical tensions are supporting gold’s search for a bottom in this downtrend, as the threat of nuclear war looms large.

Global stock markets experienced mixed results overnight, with U.S. stock indexes opening and closing lower after a hot inflation report. This week, the U.S. stock indexes have hit multi-week lows, signaling a low risk appetite, as the market finally understands that the U.S. will maintain tighter monetary policies to curb inflation. This scenario is bearish for the metals market from a global demand perspective.

Despite the volatility in the gold market, some experts predict that the precious metal’s tendency for quick selloffs and recoveries during times of panic will continue. Analysts will closely monitor macro data scheduled for next week, including the ISM manufacturing and service sector reports for February, for any signs of weakness after a more-or-less strong start to the year.

As always, don’t miss out on the newest releases and market updates by subscribing to our newsletter.

All Updates and Market info are provided as a third party analysis and do not necessarily reflect the explicit views of GoldClub Direct LLC. and should not be construed as financial advice.

 

Metals Cool Off: Market Update

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As cold weather and high winds disrupts many in the western and north-central parts of the country, gold and silver prices are also cooling off as U.S. trading draws to a close on Thursday, with gold reaching its lowest level in seven weeks and silver projected to finish slightly above its seven-week low. This is attributable, in part, to indications that the U.S. Federal Reserve will prolong its schedule of elevated interest rates, resulting in unfavorable demand implications for the metals markets.

In the current session, April gold witnessed a 0.47% decline and was last trading at $1,832.8, while March silver saw a dip of $0.337 and was priced at $21.34. Today’s updated fourth-quarter U.S. gross domestic product (GDP) report revealed inflation components that were slightly higher than anticipated. Although the report did not elicit much response, it briefly led to an increase in U.S. bond yields and bolstered gains in the U.S. dollar index.

This development comes after the FOMC minutes were released on Wednesday afternoon, which the market interpretation of both the FOMC minutes and the GDP inflation components being that the Federal Reserve will maintain a hawkish monetary policy stance for an extended period to combat rising inflation. This development is typically unfavorable for gold and silver prices, which tend to thrive in a low-interest-rate, high-inflation scenario. Select FOMC members proposed increasing the Fed fund range by 50 basis points during the January meeting, whereas a 25 basis point rise was implemented at that meeting.

Today’s trading in gold revealed a resistance level at the day’s high of $1,841.20, followed by another resistance level at this week’s high of $1,856.40. Meanwhile, support was noted at $1,824.80, with additional support at $1,815.00. The April gold futures prices have recently hit their lowest point in seven months, suggesting a bearish sentiment in the short term, supported by a downtrend. However, the bulls aim to break through the strong resistance level at last week’s high of $1,881.60 and achieve a closing price above it. Despite this goal, the current technical outlook for gold is not favorable for bullish investors. In the near term, the bears will target pushing futures prices below the robust technical support level of $1,800.00. However, the market may find some support at oversold levels around the $1,780 mark due to strong physical demand, which could lead to a rally.

March silver futures are expected to close today near their seven-week low. The current resistance levels for silver are at $21.67 and $22.00, with support levels at $21.155 and $21.00. Unfortunately, the technical outlook for silver is not in favor of bullish investors. The silver bears have the upper hand in the near term, with a steep downtrend. The next objective for silver bulls is to surpass the solid technical resistance at $23.00, while the bears aim to achieve a closing price below the solid support level at $20.00.

Meanwhile, global stock markets were generally positive, although mixed. In contrast, the U.S. stock indexes experienced a midday sell-off, with the SPX maintaining above the 4k mark. Meanwhile, the U.S. dollar index remained stable, practically unchanged.  Nymex crude oil futures prices were up by almost $1.5, trading at around $75.50 per barrel, at the same time, the yield on the benchmark U.S. 10-year Treasury note is presently at 3.881%.

So, what does all of this mean for investors in gold and silver? The combination of a hawkish Fed, rising bond yields, and a stronger dollar all point to further downside for gold and silver prices in the near term.  This could also present a great buying opportunity.

Looking to Friday, new home sales numbers and January PCE data should be released. This should shed more light on consumer spending habits and market confidence.

All Updates and Market info are provided as a third party analysis and do not necessarily reflect the explicit views of GoldClub Direct LLC. and should not be construed as financial advice.

Gold, Silver, and Beads: Market Update

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Happy Fat Tuesday everyone! Mardi Gras, a holiday celebrated around the world in anticipation of the Christian season of Lent, is in full swing today (3rd Tuesday of February). It’s a time for indulgence and revelry before the solemn period of sacrifice and penance that precedes Easter. While the holiday is best known for its parades, costumes, and partying, it also historically was a time for settling debts and making final transactions, including the exchange of precious metals before Ash Wednesday.

The carnival party has been riding high for the gold futures bears, as they grasp a slim near term technical advantage, and the prices are in a fledgling downtrend. The gold bulls are still in the game, and their next target is to close April futures above the solid resistance of $1,881.60, which was last week’s high. On the other hand, the bears are looking to push futures prices below the solid technical support of $1,800.00, but we won’t let that stop the celebration! The first resistance is seen at the overnight high of $1,856.40, and then at $1,870.90, while the first support is visible at the overnight low of $1,839.00 and the February low of $1,827.70.  Currently, Gold Futures sit at $1843.3

The silver market is also in a festive mood, with the bears have the upper hand in the near-term technical outlook. The prices are in a downtrend, but that won’t stop the silver bulls from aiming for their next upside price objective, which is to close March futures prices above the solid technical resistance level of $22.64. The next downside price is reached by closing prices below the firm support level of $20.00. The first resistance is seen at the overnight high of $21.905, followed by $22.00, while the next support level is visible at $21.50, and then at the February low of $21.155.  Currently silver futures sit at $21.885

Looking towards the equities market, the global stock markets took a hit overnight and continued to be suppressed with US trading trading lower and the S&P breaking support, currently down 1.62% to $4013.  Traders and investors are playing it safe with an elevated risk aversion as President Biden made a surprise visit to the Ukraine and promised $500 million more in aid to the war-torn nation. Coupled with Russia suspending participation in the last remaining nuclear arms control treaty with the US, the latest move has certainly triggered a few alarm bells, and the U.S.-China-Russia relations continue to hit new lows, further fueling the market’s apprehension.

The bulls are still in the game, and with solid resistance and support levels, we can still celebrate and look forward to the markets reaching back into the $1,900. So, let’s raise a glass to the precious metals market and keep the festive mood going! As commented on previously, now is a great time to look to acquisition strategies such as dollar-cost-averaging.

The GoldClub Direct free premium membership offer is still available and as always, impeccable new gold and silver arrivals at low prices! Stay tuned for more market updates!

All Updates and Market info are provided as a third party analysis and do not necessarily reflect the explicit views of GoldClub Direct LLC. and should not be construed as financial advice.

Inflation Report Puts Pressure on Gold and Silver Prices

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As the latest US inflation report for January came in smoking hot, gold and silver prices are feeling the heat with a slight dip in early US trading on Thursday. At publishing of this commentary, April gold was up $5.60 at $1850.9, while March silver increased $0.143 to $21.715. Brace yourselves, investors, as the US economic data due for release on Thursday includes a ton of hotly anticipated updates, such as the weekly jobless claims report, the producer price index, the Philadelphia Fed business survey, and new residential construction. Not to mention, several Federal Reserve officials are slated to give speeches today.

Despite the technical advantages held by the gold futures bulls, prices are in a fledgling downtrend on the daily bar chart. The bears’ next near-term downside price objective is to push futures prices below solid technical support at $1,800.00, which could spell trouble for the shiny metal. First resistance is seen at Wednesday’s high of $1,870.90, and then at this week’s high of $1,881.60. First support is seen at this week’s low of $1,839.30 and then at $1,830.00. Similarly, the silver bears hold the overall near-term technical advantage, with prices in a fledgling downtrend on the daily bar chart. The silver bulls’ next upside price objective is to close March futures prices above solid technical resistance at $23.00, while the next downside price objective for the bears is to close prices below solid support at $21.00. First resistance is seen at Wednesday’s high of $21.875, and then at this week’s high of $22.085. Next support is seen at this week’s low of $21.41 and then at $21.00.

While global stock markets are mostly higher, US stock indexes are pointing toward a lower opening when the New York day session began. In overnight news, the ongoing tension between China and the US escalated as China blacklisted US companies Lockheed and Raytheon, both major US defense contractors. This move comes after the US blacklisted six Chinese companies linked to the Chinese spy balloons. What does this mean for the market? Only time will tell, but it could lead to some serious turbulence.

The US dollar index is weaker on a corrective pullback from recent good gains that saw the index hit a five-week high on Wednesday. Nymex crude oil futures prices are slightly up, trading around $78.75 a barrel. On the other hand, the yield on the benchmark US 10-year Treasury note is presently fetching a hefty 3.788%, giving traders something to chew on.

Watch out, investors, as gold’s high-convexity allure may be on full display over the next couple of months. With the Federal Reserve taking its benchmark to at least 5.25%, pushing real rates higher, gold is likely to stay tethered around $1,800 an ounce. This could induce short-straddle expressions in the interim. The hotter PPI report falls into the camp of the US monetary policy hawks, who want to see the Fed continue to raise US interest rates to choke off problematic price inflation.

Don’t forget to visit our gold and silver new arrival pages for the newest product releases and to stay tuned for more market updates!

All Updates and Market info are provided as a third party analysis and do not necessarily reflect the explicit views of GoldClub Direct LLC. and should not be construed as financial advice.

The Great Gold Standoff: US Labor Market Defies Expectations, Gold Market Stays Stable

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In light of labor market developments, the gold market has remained in a stable holding pattern, currently trading at $1,877 an ounce, up from the previous day. Technically, both gold and silver futures have gained momentum this week and remains bullish, with gold having resistance levels at $1,900 and $1,915, and support levels at $1,880 and $1,873. Silver futures have resistance levels at $22.65 and $23, with support levels at $22.12 and $22.  Still down sharply from last week and  despite the fluctuations in the labor market, the gold market has maintained its stability below the $1,900 an ounce threshold.  Future traders will look for an April close above the $1,975 resistance level.

The United States labor market has been a focal point of economists as it holds a significant influence on the Federal Reserve’s monetary policy. Today, the U.S. Labor Department reported an increase in weekly jobless claims by 13,000 to 196,000, which missed expectations. Although the latest data showed a rise in claims, the four-week moving average, viewed as a more reliable measure, slightly fell to 189,250. Continuing jobless claims were at 1.688 million during the week ending January 28, a rise of 38,000 from the previous week.

Despite the recent uptick in jobless claims, the U.S. labor market has managed to defy expectations of a slowdown, as 517,000 jobs were ‘created’ last month according to the Bureau of Labor Statistics.  It’s important to keep in mind that the BLS had released a number of data revisions as it relates to reclassification of titles and sectors such as seasonal employment.  And when we look at the data closer, its easy to see how the market actually lost more full-time employees while adding part-time employees. Federal Reserve Chair Jerome Powell noted that the central bank would need to see softness in the labor market before it would consider loosening its aggressive monetary policy stance.

Looking to next week as top officials, including New York Fed President Williams and Atlanta Fed President Bostic, are advocating for a higher peak interest rate in response to the recent job growth in the U.S. With the next Consumer Price Index (CPI) data set to be released next Tuesday, the market is eagerly awaiting its impact on the economy. While some predict a decrease in inflationary data, which could boost risk assets and hurt the dollar, others are hoping for an increase in the U.S. CPI data. If the data comes in higher than expected, we could see a rally in U.S. Treasury yields and a strengthening of the dollar. This could put pressure on the gold market, as gold is a non-interest-bearing asset.

As the Federal Reserve’s policy shifts, the market is predicting a peak rate of 5.1% in comparison to the current rate of 4.6%. The pivot point is expected to occur in August. At the end of the day, the gold market’s stability in the face of unexpected labor market developments is a testament to the precious metal’s enduring value and reliability as a safe haven investment. Whether it’s political turmoil, economic instability, or a global pandemic, gold continues to prove its worth as a dependable store of wealth. It’s an exciting time for economic analysis and forecasting, and we’re all buckling up for the economic roller coaster ahead!

All Updates and Market info are provided as a third party analysis and do not necessarily reflect the explicit views of GoldClub Direct LLC. and should not be construed as financial advice.

Market update 2/2/23

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Gold and silver prices are down sharply from yesterday’s highs, currently sitting at $1922.33 and 23.59. Precious metals had been soaring lately, reaching a 9-month high yesterday. The rising precious metals prices had been fueled by the belief that the Federal Reserve may ease up on its monetary policy sooner rather than later. The market is still digesting the Federal Open Market Committee (FOMC) statement and Fed Chair Jerome Powell’s press conference from yesterday. Although the Fed raised the Fed funds rate range as expected, Powell’s remarks indicated that the Fed may be close to ending its string of interest rate increases. The European Central Bank and the Bank of England both raised their main interest rates by 0.5% in their monetary policy meetings today, which was expected.

US stock indexes opened higher with S&P at its highest level in 5 months and the US dollar index opened a bit higher, albeit a bit weaker, hitting a 9-month low yesterday. The yield on the US 10-year Treasury note is 3.409%. Key US economic data releases for Thursday include the weekly jobless claims report and the January employment situation report from the Labor Department, which is expected to show an increase of 187,000 jobs.

Technically, gold and silver futures both have the advantage and have gained momentum this week. For gold, the next resistance is at $1,975.00 and $1,985.00, with support at $1,950.00 and $1,936.00. For silver, resistance is at $24.65 and $24.78, with support at $24.00 and $23.50.

In other news, GoldClub Direct is pleased to introduce the Argor Heraeus Mint’s line of products to our members!  These gorgeous bars are in-stock and available now. Please don’t hesitate to reach out to GoldClub support specialists for any questions you may have by phone at 1-800-700-4715, by email at [email protected], or through the live chat feature in the bottom right-hand corner.

All Updates and Market info are provided as a third party analysis and do not necessarily reflect the explicit views of GoldClub Direct LLC. and should not be construed as financial advice.

King Charles III, The New Face of British Coinage

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In recent months, Britain has continued its mourning after the passing of Queen Elizabeth II in September 2022. As they heal, many changes have begun with the adoption of King Charles III on coinage and banknotes. The King has not officially been coronated, with the coronation of King Charles and his wife, Camilla, scheduled for Saturday, May 6, 2023. The long period with no official monarch is a long-standing tradition that the country remains in mourning for an appropriate amount of time.

As noted in the GoldClub Review earlier this year, the Royal Mint unveiled the new portrait of King Charles III in October 2022. The design was created by British sculptor Martin Jennings. Jennings is a well-respected artist, known for his ability to capture the likeness and personality of his subjects in his sculptures. The portrait was sculpted from a photograph of the King and incorporates elements from iconic portraits of other monarchs from Britain’s vast history of coinage. This design has been personally approved by King Charles III.

One of King Charles III’s main priorities is sustainability. The royal household advised major governmental organizations to take this into account with the change in the monarchy. The Royal Mint, Royal Mail, and Bank of England all announced the change of effigies will take place gradually to lower the cost and environmental impact. New coinage and banknotes will be produced to replace old, worn-out currency, but banknotes featuring Queen Elizabeth II will continue to circulate. Currency featuring Queen Elizabeth II is expected to be in circulation for at least 20 more years. King Charles will be only the second monarch to be featured on banknotes, as Queen Elizabeth II’s effigy only began appearing on banknotes in 1960.

Updated Features

The new design differs from Queen Elizabeth II’s effigy in a few ways. The new portrait shows King Charles III in left-profile relief, opposite his mother’s. It is a tradition in the monarchy to change the direction the monarch faces when every new monarch comes into power. The King is also portrayed without a crown, contrasting many of Queen Elizabeth’s effigies. Surrounding the portrait is the inscription “• CHARLES III • D • G • REX • F • D,”  which translates to “King Charles III, by the Grace of God, Defender of the Faith” in Latin.

The first coins to feature this effigy were the 50 pence coin and the commemorative £5 coin. The coins’ releases were meant to honor the life of Queen Elizabeth II. The 50 pence coin features King Charles III on one side and a design highlighting the 1953 coronation of Queen Elizabeth II on the reverse side. 9.6 billion coins are going to be produced to honor the Queen’s 96 years of life. The reverse of the commemorative £5 coin features two portraits of Queen Elizabeth II designed by artist John Bergdahl.

Obverse and Reverse

The first 2023 Britannias to include King Charles III on the obverse have now been minted and are available to order from GoldClub Direct. The reverse face of the coin remains the same design. For a limited release, the Royal Mint produced 2023 Britannias that featured Queen Elizabeth II as they were adapting to the largest change in British coinage in decades. Throughout this year and in future years, more and more bullion products from the Royal Mint will feature King Charles III. 

It is not only British coinage that is affected by this change. All members of the British Commonwealth also feature the monarch on their currency. Countries like Canada, Australia, and others will also change their currency to feature King Charles III. These portraits could be different from those of the Royal Mint as each sovereign mint has the ability to create its own design.

2023 Gold and Silver Britannia’s and other King Charles III coinage available now!

If you are looking to be one of the first investors or collectors to get your hands on bullion coins featuring King Charles III, check out GoldClub Direct for some of the lowest prices on the internet. Please don’t hesitate to reach out to GoldClub support specialists for any questions you may have. They are reachable by phone at 1-800-700-4715, by email at [email protected], or through the live chat feature in the bottom right-hand corner.

All Updates and Market info are provided as a third party analysis and do not necessarily reflect the explicit views of GoldClub Direct LLC. and should not be construed as financial advice.

Introduction to Precious Metals Investment Strategy Theory: Dollar-Cost Averaging

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Most things in life don’t come with “free trials” or “investment insurance” and starting something is never easy; we all have different goals, risk tolerance and time horizon. When it comes to investing in precious metals, it can be difficult to know where to start and how to come up with a personal investment strategy that works for you.  For many, the journey begins with a desire to protect family wealth and diversify one’s portfolio. As the global economy becomes increasingly uncertain and markets become more volatile, many look to find a way to protect investments from potential downturns.

Enter the potential benefits of investing in precious metals.

It is quickly evident that precious metals have a low correlation with other asset classes and can act as a “safe haven” investment during times of economic turmoil. This makes them an attractive portfolio diversification tool.

There are several different strategies that investors can use when investing in precious metals. Some examples include:

·         Physical ownership: This strategy involves physically owning the precious metal, such as buying gold or silver coins or bars. This can be a good option for investors who want to have direct control over their investment and the ability to physically hold and store the metal.

·         ETFs and Mutual Funds: This strategy involves investing in exchange-traded funds (ETFs) or mutual funds that track the price of precious metals. This can be a good option for investors who want to gain exposure to precious metals without the hassle of physically storing them.

·         Mining stocks: This strategy involves investing in companies that mine and extract precious metals. This can be a more speculative option, as the performance of mining stocks is often closely tied to the price of the underlying metal.

·         Options and Futures: This strategy involves buying options or futures contracts on precious metals. This can be a more advanced and risky strategy, as options and futures trading involves significant leverage and can result in large losses if not executed properly.

·         Collectible Coins: This strategy involves investing in rare and collectible coins, which can appreciate in value over time due to their rarity and historical significance.

·         Allocation strategy: This strategy involves allocating a specific percentage of a portfolio to precious metals. This can be a good option for investors who want to diversify their portfolio and gain exposure to precious metals without over-allocating to the asset class.

 

Dollar-cost averaging

While many of the above options pose as suitable starting points, let’s take a closer look at one of the most commonly used strategies when combining physical acquisition with an allocation strategy. The first thing to understand about  Dollar-Cost Averaging (DCA) is that it is a way to reduce the risk of market timing. DCA is a popular investment strategy that involves investing a fixed amount of money at regular intervals, regardless of the price of the asset. This strategy is often used by investors when buying stocks, but it can also be applied to investing in precious metals, such as gold and silver. DCA can be an effective strategy when investing in precious metals and can help mitigate the risk of market volatility.

 When investing in precious metals, it can be tempting to try to time the market by buying when prices are low and selling when prices are high. However, this can be a difficult and unreliable strategy, as predicting the direction of the market is never certain. DCA helps to mitigate this risk by investing a fixed amount of money at regular intervals, regardless of the current price of the asset. This means that investors are buying precious metals at different prices, which helps to average out the cost of their investment over time.

DCA is also effective at mitigating the risk of volatility. Precious metals are known for their volatility, and the prices of gold and silver can fluctuate greatly over short periods of time. This can make investing in precious metals a risky proposition for some investors. However, DCA helps to mitigate this risk by investing a fixed amount of money at regular intervals, regardless of the current price of the asset. This means that investors are buying more precious metals when prices are low and less when prices are high. This helps to reduce the overall volatility of the investment and ensure that investors are not buying at the top of the market.

Another advantage of DCA is that it encourages long-term investing. When investing in precious metals, it can be easy to get caught up in short-term fluctuations in the market. However, DCA encourages investors to focus on the long-term by investing a fixed amount of money at regular intervals. This helps to ensure that investors are not swayed by short-term market fluctuations and are instead focused on the long-term potential of their investment.

DCA is also a simple and easy strategy to implement. Unlike other investment strategies, which can be complex and difficult to understand, DCA is a straightforward and easy-to-implement strategy. All an investor needs to do is decide how much they want to invest, and then invest that amount at regular intervals. This can be done through a broker or a precious metals IRA, and it can be automated so that the investor does not have to worry about timing the market.

Finally, DCA is a cost-effective strategy. When investing in precious metals, investors often must pay a premium for the metal, which can be a significant cost. DCA helps to mitigate this cost by investing a fixed amount of money at regular intervals, regardless of the current price of the asset. This means that investors are buying precious metals at different prices, which helps to average out the cost of their investment over time. Moreover, investors are likely to closely mirror the 50- and 100-day moving averages by engaging in this type of strategy.

It is important to note that there can be some drawbacks to this strategy:

·         One of the downsides of DCA is that it may not take advantage of market opportunities and result in a higher overall cost for the investment.

·         Another downside is that it may not be suitable for investors with a short-term time horizon and for those looking for a quick profit.

·         DCA may not perform well in a rapidly rising market, as it may lead to buying more of the asset at higher prices, lowering the potential return on investment.

·         It can be a costly strategy as it requires regular contributions to the investment regardless of market conditions, which can be a burden for some investors.

While there is no free trial, DCA does offer a way to test a market and investment while minimizing upfront risk. Dollar-cost averaging is a powerful strategy that can help investors mitigate the risk of market volatility and encourage long-term investing when it comes to precious metals. It is simple, easy to implement and cost-effective. By investing a fixed amount of money at regular intervals, regardless of the current price of the asset, investors are able to average out the cost of their investment over time, which helps to reduce the overall volatility of the investment and ensure that they are not buying at the top of the market.

It is important to note that, like any investment strategy, DCA doesn’t guarantee profits or protect against losses. It’s always important to do your own research.

All Updates and Market info are provided as a third party analysis and do not necessarily reflect the explicit views of GoldClub Direct LLC.. and should not be construed as financial advice.