It will be no news to anyone following me thus far that gold price recently rose to the all-time high in USD, and had long ago passed the all-time high in EUR. Also, if you followed me long enough, you’ll know that I predicted this much before the current corona-crisis and what not; so, you know those things have nothing to do with it, other than exacerbating the shortages of physical metal on the market, compared to the “paper”.
The expected question would be, is it still a good idea to buy, or should we wait for the current spike to subside? If you take a look at the graph, it’s obvious that the growth isn’t linear, and the price goes back a little after each spike, so the question is valid. However, we don’t live in “business as usual” times. There are presently no shortages of gold on the retail market, and the prices are well above those in the corona-peak, premiums and all. My assessment is that the target price of gold is somewhere in between 15000 USD per troy ounce, and 100000 USD per troy ounce, depending on several factors that are difficult to predict, such as the actual volume of fiat currency that will have to be backed by gold, the number of retirement funds, hedge funds and others who might exchange sovereign bonds for gold, the percentage of citizens with savings who might rush to gold in attempt to save their money from inflation, the percentage of holders of speculative and volatile assets who might want to save whatever they can when their respective markets collapse, etc. It’s difficult to predict, but in any case, the predicted end-game price of gold is at least 7.5x of what it is now. This makes long-term decisions easy. Short term, you tell me; I certainly can’t tell. There’s too much short-term chaos, even without people who don’t know what they are doing, and who seem to have taken to trading on their phones during the quarantine. I sense chaos, panic and anxiety in the air (coming from the deep levels of finance), with only a whiff of greed (and that comes from the hipsters who don’t know what they’re doing). What we want to do is do all the buying before the graph turns from linear to geometric, and at that point you’ll look at the gold price somewhere between the AC unit and the roof, projecting from the current graph on your screen.
What about silver? I don’t know. It might blow up, it might do nothing. I don’t know what it will do, and unlike gold, it didn’t do anything logical so far, so I can’t anticipate its behavior in the future. Sorry. I’ll stick mostly to gold, and hold just enough silver to not regret it if it actually does what some silver bugs are predicting.