nimblepanther18 said:I’ve been reading several articles suggesting that Germany is headed straight for a recession. If stocks take a dive, what does that mean for metals? dustyheron5 shared an article claiming that JPMorgan Chase is recommending gold purchases right now, but I personally struggle to see how that makes sense if we are actually entering a recession. Furthermore, when looking at silver—which is essentially an industrial metal that tends to peak when industrial demand is high—I would actually expect silver to see an even steeper decline than gold. Because of this, I intend to hold off on buying until a correction occurs. Am I miscalculating here? What are your thoughts, or are there other factors at play that might prevent such extreme volatility in metal prices?
PS. Personally, I found the market's reaction to the announcement of QE 3 quite disappointing.
Wrong. It’s always a smart move to hold gold when the country is in crisis.
Silver plays both sides as an industrial and monetary metal, making it a win-win.
First, its price doesn't really swing based on industrial demand because it's price-elastic (it accounts for such a tiny fraction of the final product cost that whether it's $30 or $150 doesn't matter).
Second, most silver is just pulled out as a byproduct of copper, lead, and zinc mining. That means if industrial activity drops, supply will naturally tighten.
Third, just like gold, people try to protect whatever little they have left during a crisis. Buy gold at $1,400? Not many people can afford that. Buy real estate or farmland? Sure, if you're one of those vultures in the finance industry... In reality, silver is what's left for everyone else.
Of course, if you're just looking to gamble, I can't help you. 😁
