The gold price spiked Sunday night to a price of $1,691.70, nearly breaking through that $1,700 benchmark, but came off a bit as the market opened this morning. But the excitement is not over. Investors are starting to move funds into safe-haven assets amid market turbulence and the continued spread of the coronavirus. As safe-haven assets, gold and silver play an inverse role to the equity markets, so since the DJIA was down 848.48 points today – a 2.93% decrease – analysts were not surprised that gold was up.
In related news, the coronavirus outbreak is also having damaging effects on the manufacturing indexes of major global economies. Even U.S. companies are stating in their earnings reports that the spread of the coronavirus has impacted their bottom lines. The entire global marketplace has quickly realized the major disruption the coronavirus has had and, consequently, the important roles that China’s economy plays in the world supply chain and global economy overall.
Silver is increasing slowly but is still pressed down, stretching the gold-to-silver ratio farther to nearly 89:1 and thus creating a great buying opportunity. The way that the gold prices continue to outpace the silver reminds me of a rubber band. Historically, the gold-to-silver ratio average should be about 30:1, so as the difference grows, so does the pressure to come back to historical averages. It is only a matter of time until we see silver’s powerful snap back to a normal ratio.
This morning I made another silver purchase to add to my personal holdings in preparation for what lies ahead. Prepare yourself and your portfolio for times of turbulence by adding physical gold and silver to help mitigate risk. If you have already allocated gold and silver as wealth insurance, consider that they’re currently poised for significant upsides. It may be an opportune time to invest in them for profit.
As always, my teams are ready and able to take your calls, questions and orders. Please do not hesitate to reach out today.Gold Spiked