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Alert: Metals Slide to 3-Month Lows

The Team 
NOV 8, 2019

Precious metals just enjoyed a heady 3 months in the limelight.

Gold and silver were a “hot trade”… featured on CNBC... and the front-pages of financial sites around the world.

Your neighbors or co-workers may have even started to take notice.

But now the market is cooling. Wall Street appears to be brushing aside metals and once again piling into stocks.

Do you think they are right? Have the catalysts for metals disappeared?

The Federal Reserve doesn’t appear to agree…

The world’s most powerful central bank is doing massive interventions to stoke buying of paper assets and encourage risk.

And despite some positive headlines on the trade war, the geopolitical landscape is almost just as shaky as it was when gold touched 6-year highs in September.

In fact, there’s almost as many reasons to own metals today as there was a few months ago. Here are five just to name a few:

  1. The Federal Reserve has cut rates three times in a preemptive bid to stave off a protracted slowdown… an action that has portended recessions since 1990.
  2. Once temporary, the overnight repo market bailouts have now been made automatic and permanent with the Fed promising to purchase $60 billion in Treasuries a month until at least April of next year.
  3. Impeachment inquiries into President Trump are threatening to oust the leader of what was looking to be one of the most stock-market-friendly administrations in history.
  4. One of the biggest buyers of stocks today are not investors but corporations themselves, as buybacks have become the “dominant” source of stock market demand.
  5. Stock valuations are so detached from earnings, that a dollar invested in stocks today is not expected to see a return for 30 years. The current P/E ratio is the third highest in history just after 2000 and 1929.

And this is just scratching the surface…

The writing is on the wall. Paper assets can move on a whim and what they are truly worth is difficult to determine.

But gold and silver are eternal elements... stores of value that can strengthen portfolios over time.

And this pullback in gold and silver prices may just be an opportunity to add to your holdings or make that first-time purchase…