Is Now the Time to Buy Gold or Silver? – Q&A With The Doc

Doc,
Would you please advise if this is a good time to purchase either silver or gold

Would you advise buying silver in increments each week or in one bulk purchase?

RS,

As legendary gold trader Jim Sinclair has long stated, the hardest part is not the decision to buy gold and silver, it is to Be Right, and Sit Tight. 

Dollar cost averaging by buying in increments each week or month does have several advantages,  particularly emotionally.

For example, if you put 100% of your assets into gold or silver immediately in one lump allocation (or into any investment for that matter), if price temporarily declines 5%, 10%, or even 20%, you will (over the immediate short term) emotionally feel like you made a mistake and should have waited for the further decline.

If you make your purchases in increments however, if price declines after your initial purchase, you are likely to be much more comfortable and confident from an emotional standpoint, because your next incremental purchase will now be made at a discount (ie. more ounces, or lower $ cost for same amount of ounces).

Likewise, if the price increases after your initial purchase, while technically missing out on the potential gains had you allocated 100% of your capital at the lower price, emotionally you will be happy because that initial purchase is already positive and has “made you money”.

The most important part (yet by far the most difficult) of financial decisions is completely removing your emotions of greed and fear from the process, and incremental purchases help quite a bit in this regard.  (99% of the public base their investment decisions on either fear or greed, which is why the public notoriously always sells when a market is bottoming, and buys when a market is topping)

As far as the outlook for gold and silver in general at this point in time, while I am not a licensed investment adviser, so I cannot give you any specific investment advice legally,  I can tell you that I personally recently bought physical gold for the first time since gold was at $900/oz as I believed we were at or very near a long-term bottom in gold. (While I acquired the majority of my silver holdings over a decade ago, I’ve continued to DCA to increase my silver stack ever since as funds allow). 

This week’s actions by the bullion banks as gold made a new higher high (confirming a bull market is underway by conventional technical analysis) brutally smashing the metal back under $1300 demonstrate just how desperate the cartel is to contain gold here.

The fact that gold technically made an outside reversal day to the downside on Thursday means that it may take a bit to recover from the damage inflicted by the banksters, but I am looking for gold to clear $1300 to the upside for good on the 3rd tap (2 taps down, break-out on the 3rd?).

Silver is very attractive here still below $18, I personally believe downside risk is likely in the $10-$12 range (WORST CASE SCENARIO), and if the 3rd leg of the secular bull market is now underway, the upside remains what it was prior to its 5-year grinding correction. (I’m looking for silver to reach or surpass a 5 to 1 ratio to gold)

If any further downside action below $15 materializes however, expect premiums on silver eagles to jump back towards $5-$6 an ounce so if you are looking to buy physical silver don’t expect it be available for $12 or $13 an ounce if a market crash this fall drags silver under $13. 

Just My .02. 

All the best!

-Doc