In view of the global stock market crashes and the slump in gold and silver prices over the past three months, I am updating my gold and silver strategy section.
My approach is entirely unrepentant. Gold and silver remain the best strategy for investors – and I have held on to all my positions. They are down but I doubt if it would be possible to assemble them at the low prices of today because markets are likely to turn fast.
But for new investors the chance to buy gold and silver at today’s prices is a lifetime opportunity, and looks as though the residents of Dubai agree with me as they have just emptied the gold souk.
However, the best buys of all are in the bombed out gold and silver stocks. In particular I like those producers geared towards a price rise (Seabridge Gold which I hold) and especially the better junior explorers (like Linux Gold which has first class claims next to existing mines, cash from a recent share placing and strong management – and yes I am a small shareholder).
Silver is my other top pick. It is horribly volatile but has outperformed gold by a factor of two in the 2000s, and is a long way from its 15:1 long-term ratio to the gold price. Even better buy large silver producers to lever the silver price (Pan American Silver is my pick), or a silver explorer if you can find a good one (Endeavour Silver is my choice). 
That is it really. Prices are really down, and inflation prospects are outstanding which is what will really drive precious metal prices along with US dollar devaluation. The $4 trillion in bank bailouts and 35% increase in US money supply over the past six weeks make this a guaranteed formula for investment success. Just give it time but do not be too slow in buying.
Good luck – but I take absolutely no responsible for your decisions, and one final tip – NEVER EVER borrow or use margin for investment in precious metals. They are simply too volatile.
Order my book online from this link
Peter,
Really like your site, and have to agree with all of what you say here.
Regards
Ed
Comment by Ed — May 21, 2008 @ 2:23 pm
i agree with peter, agree with everything you say and very much like the site, very informative.
Comment by roland corbin — June 26, 2008 @ 2:53 am
PS If you missed the surge in bullion prices go for gold stocks, especially the juniors, they just have to follow!
Comment by peterjcooper — July 12, 2008 @ 12:14 pm
very interesting site and comments
MEXICO is planning to use silver as current money
they aredisscusing it at the congress of mexico
i would like to read your comment about this
Comment by vicente rosas — August 6, 2008 @ 1:12 am
How interesting - given the production of silver in Mexico this would make a lot of sense. The need to tackle inflation is going to result in a renewal of interest in precious metal backing for currencies. Please send me more information on this development - it has been missed elsewhere.
Comment by peterjcooper — August 6, 2008 @ 12:29 pm
Gold trade through the emirate in the first half of the year surged 48 per cent to $13.07 billion from the same period a year earlier, while total exports rose 26.1 per cent to 179 tonnes, figures from the Dubai Multi Commodities Centre (DMCC) showed last month.
“We are definitely witnessing a surge in demand for gold in Dubai and physical shortages have been reported by many dealers,” said Ian MacDonald, DMCC’s executive director for gold and precious metals.
“We are also seeing demand being driven by currency concerns in the region as many investors perceive the precious metal as one of the few strong currencies.” Gold is seen as a safe-haven metal and a hedge against inflation. The metal is also influenced by oil, currency moves, and generally trades in the opposite direction to the dollar.
The dollar, to which Gulf currencies are pegged, has been rising in recent weeks as oil has fallen but inflation remains high across the Gulf Arab region.
Comment by peterjcooper — September 3, 2008 @ 1:06 pm
I am really enjoying this site!
Peter, can you recommend a good starting point for investing in junior mining shares?
Comment by siw — September 8, 2008 @ 1:48 am
Have a look at http://www.goldseek.com. You will also see a link to Linux Gold on my home page which I think has the right qualities but you would need to be brave as the share performance has been poor over the summer - that just makes it a better buy in my book.
Comment by peterjcooper — September 8, 2008 @ 9:36 am
Enough is enough! How long do we have to watch all the criminal manipulation on the gold market done by the likes of JP Morgan on behalf of the Fed? There are lots of people out there, common people like me, who bought gold and silver with honest money and hard made savings just to protect ourselves from financial tzunami caused by the greed of the arrogant bankers and financieres. No one seems to notice the criminal manipulation going on, time after time ( during New York time!) It’s a war between paper and gold. The few honest and competent people write articles about it… but nobody (except Ted Butler) has done a concrete action against it… or may be we, the common people, are all too stupid to say anything against the actions of such intelligent criminals!
With my most respect.
Comment by rita aquilini — October 11, 2008 @ 8:44 pm
Rita - markets always take control in the end - these guys are the ones under pressure not you..
They have not done a very good job on supporting stock prices have they? Gold and silver will be next - the forces building up are so enormous nothing can stand in its way… $7 trillion has been injected into the global monetary system this year = inflation = gold and silver up.
Comment by peterjcooper — October 12, 2008 @ 8:59 am
After getting the Wall Street crash right, may I humbly submit that the observations on the bond market crash just have to be correct - those who sold equities and bought bonds last week will suffer a double whammy. After bonds have gone as a safe haven that leaves USD with higher interest rates and gold and silver as fixed assets with limited supply. Finally the USD will be destroyed as a safe haven by inflation and printing money, and that will only leave precious metals. Then we need to have some sort of renaissance of capitalism.
Comment by peterjcooper — October 14, 2008 @ 11:22 am
What is your opinion of Goldcorp and IAU silver etf? I have both and only small holdings in junior minors Consitution Mining and Clifton Mining. I am all in with gold and silver, physical, ETF’s, miners… and USO which I rode all the way down. Did I say I was a novice? Been learning the hard, old-fashioned way…(heh)…(October 14, 2008).
Comment by Tracy Reinert — October 14, 2008 @ 8:56 pm
I don’t know enough to advise you on individual stocks. But from a broader perspective the global banking crisis is going to benefit precious metals sooner or later, and I would not want to be out of precious metals in case that happened tomorrow. A bond crisis is absolutely unavoidable after last week’s equity crash - and that will mean a flight to cash and precious metals. Hold with it, that is how correct strategies succeed.
Comment by peterjcooper — October 15, 2008 @ 8:43 am
I have been purchasing gold for about two years now, mostly swiss francs, soviergns, krugerands, eagles, etc. I’m considering getting into buying the 10 oz bars from now on, as they don’t have nearly the premium I’m paying for the coins.
Is there any reason I should avoid this practice, and is it important to get the coins that are minted before the confiscation date..1933 I think? Does that matter?
I made my second purchase of silver. I got half in 100 oz bars, and the rest in maple leaf coins. Does it matter if I get the big bars? or the coins? again, trying to save on the premium.
One other question, I hear rumors that the mid eastern buyers of physical gold are paying premiums as well. Any idea what the premium over spot might be for that physical gold? I understand that in Germany, there is a black market in physical silver operating right out in the open. Is that true, or more rumor?
Thanks,
Comment by Matt C. — November 15, 2008 @ 10:29 am
If you want to save on the premiums then ETFs are your best bet - I know purists do not like them but unless you are a huge investor they offer excellent liquidity and low-cost. It is a bit paranoid to think a precious metal ETF could blow up as the physical metal purchases by the ETF are well documented and unlikely to fall far behind the ETF price.
Not sure on the premium rumors but I hear the same thing - is that an echo or a confirmation? I generally think no smoke without fire!
Comment by peterjcooper — November 15, 2008 @ 11:31 am
Actually for over $250k Perth Mint has a zero premium scheme with zero storage charge for unallocated metal - that would be my choice.
Comment by peterjcooper — November 15, 2008 @ 11:32 am