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July
25
2018

Disregard The Noise: Here's Why Gold And Silver Prices Are Going Much Higher
Victor Dergunov

Summary

Gold and silver have been victims of steep declines in recent weeks, with gold dropping by roughly 7%, and silver by about 12% since the Fed's decision in mid-June.

But despite the recent declines, the backdrop for precious metals remains very strong.

Inflation is already spiking, but trade tariffs and other factors should accelerate the inflationary process going forward.

In addition, the U.S.'s national debt is the elephant in the room nobody wants to talk about, but the only way it's getting smaller is if it gets inflated away.

Recent price gyrations are likely mostly related to short-term trading positioning, but fundamentals support much higher gold and silver prices intermediate and long term.

This idea was discussed in more depth with members of my private investing community, Albright Investment Group .

Why Gold And Silver Prices Are Going Much Higher

The precious metals selloff is very likely coming to an end, nevertheless, Gold/SPDR Gold Shares (GLD) and Silver/iShares Silver Trust (SLV) have gotten slammed quite hard over the past five weeks. Prices have plunged by 7%, and 12% respectively since the Fed’s rate hike decision in mid-June.

However, despite the recent declines, gold and silver remain above key levels, the inflation picture continues to heat up, and record amounts of debt are towering all around us. Therefore, the recent selloff is overwhelmingly likely a transient phenomenon, mostly decoupled from any intermediate or long term fundamentals, and represents a very compelling buying opportunity at current levels.

Background Information About GLD/SLV ETFs

GLD is the largest, reportedly physically-backed gold exchange-traded fund in the world, with roughly $35 billion worth of net assets. GLD offers market participants an efficient way to access the gold market. The ETF is an attractive alternative to trading gold futures, as it can be traded much like a stock on the NYSE Arca exchange instead of dealing with alternative exchanges and trading requirements pertaining to futures contracts.

 

 

Founder of Albright Investment Group, management expert, active investor, MBA graduate, and entrepreneur. I have a Bachelor of Science degree in management, and an MBA with a specialization in finance from top tier universities. I've been investing since 2002, and I enjoy writing about companies and topics that interest me. I manage a private long equity and ETF fund, as well as a secondary hedging and trading portfolio. I also host a Marketplace service here on Seeking Alpha, Albright Investment Group.  

 

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