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BIG BEAR, or BUYING OPPORTUNITY? The State of Precious Metals Now
Investors and analysts are as polarized on precious metals as they have ever been. What exactly are we looking at with the price pressure in gold and silver in 2018? Does it make sense to take a new position or add to an existing one? Or, should investors cut and run, abiding by the trader’s adage “cut your losers short”? After all, one person’s “loser” can be somebody else’s buying opportunity…
Wealth Research Group constantly watches the metals and miners sector, and we were happy to speak with expert Peter Hug, Director of Kitco’s Precious Metals Division (the company can be found online at Kitco.com), regarding today’s most crucial issues. Peter is one of the greatest minds in the metals and miners arena, and Kitco is a premier firm in the precious metals space. On behalf of all the gold and silver stackers out there, I wanted to ask Mr. Hug some of the tough questions that struggling investors have right now.
Mr. Hug also served as the Senior Vice President at Guardian Trust Company, which is among the largest international trading houses for precious metals. Peter is also known for having developed the first precious metals certificate program and the first margin trading accounts for metals on the cash market.
A frequent speaker at precious metals conferences and in the financial media, Peter Hug has acquired extensive experience in the wholesale markets and international asset diversification. Mr. Hug is one of a handful of experts who have succeeded through multiple bull and bear cycles on the strength and skills he has honed during the dramatic market fluctuations of the 1980s.
Courtesy of Kitco.com
In the recent Wealth Research Group interview with Peter Hug, we wanted to know if there is a compelling reason to invest in precious metals in today’s market environment. We were looking to answer the question that has been asked by many investors: What is the purpose of buying precious metals in physical form, and there a real reason to do so right now?
According to Peter Hug, in today’s climate, it’s important to have a portion of your portfolio in gold or in some type of related commodity asset: this can be gold, silver, platinum, or palladium. Mr. Hug also stated that he has been bullish on rhodium for the past two years; he still sees considerable upside in rhodium prices, even though it has moved from $700 to $2,300. Indeed, based on supply and demand, Peter feels that the $3,500 to $4,000 figure over the next several years is a real possibility for rhodium.
However, it all depends on the motivation of the investor – the reason why you would buy gold. According to Peter Hug, you could treat gold the way you would treat anything else in your portfolio: Apple stock, bonds, real estate, etc. Are you in gold for a specific capital gain, and what’s your time horizon on that capital gain? Or are you in the game because you want to hedge a certain percentage of your portfolio, in case we have a financial crisis like we saw in 2008?
Or, are you in the game because you believe that it’s just a matter of time before the financial system collapses, and you want to have some liquid assets to protect your overall well-being? This latter group tends to buy physical gold, as opposed to ETF’s or mutual funds, whereas the investors who are looking for capital gains have had numerous opportunities to trade and make money in the precious metals markets.
So, according to Peter Hug, traders can still effectively get in and out of this precious metals market. From a hedging perspective, in contrast, it still makes sense to hold physical gold in your portfolio, as long as you recalibrate that position every six months.
Mr. Hug also expressed his belief that there are considerable risks in the global economy, and that these risks are growing on a daily basis. Peter sees particular risks in the Middle East, with issues such as Turkey’s liquidity, which could have some serious impact on the European banking structure and could create contagion to the U.S. financial system.
Peter Hug also sees potential issues with the trade war between the U.S. and China accelerating. Thus, Peter sees a number of issues on the immediate horizon that suggest owning gold would be a prudent strategy, at least as a percentage of your overall portfolio. Wealth Research Group highly recommends Kitco as a top source of all things related to gold, silver, and other precious metals.
This Wealth Research Group interview with Peter Hug was fascinating, and I strongly suggest that you listen to the entire video. Now is also a great time to you definitely want to download Wealth Research Group’s Ultimate Report on Safe-Haven Assets so you can protect yourself in these uncertain times. Other exclusive reports to download today include My Personal Treasure Trove which includes my top 4 stocks for 2018, as well as our Quintessential Gold and Silver Stock Playbook to see how we’re playing the precious metals markets right now.
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This work is based on SEC filings, current events, interviews, corporate press releases and what we’ve learned as financial journalists. It may contain errors and you shouldn’t make any investment decision based solely on what you read here. It’s your money and your responsibility. Information contained in this profile was extracted from current documents filed with the SEC, the company web site and other publicly available sources deemed reliable. The information herein is not intended to be personal legal or investment advice and may not be appropriate or applicable for all readers. If personal advice is needed, the services of a qualified legal, investment or tax professional should be sought.