Gold, silver, copper? Too late to invest?

Question

In 2005 gold, silver, and other precious metal ETF's, such as SPDR's Gold Shares (GLD) and iShares Silver (SLV) were roughly less than half what they are worth now. Is this bubble just a steady incline of the dollar losing value, only to decrease once the market bounces back; or are these funds going to be a steady incline for many years to come, despite the dollar's performance?

Answer 1

Historically you see boom bust cycles with precious metals/commodities.

I do think that there is an argument for commodities to maintain and slowly grow from their present levels (supply demand).  Precious metals however, have been used as a hedge against inflation and are a safe haven to put your money into when the markets are scared.

Eventually the markets will turn around.  I don't have a crystal ball to tell me when that this will happen, but when you do you will see a mass exit out of metals and into equities.

Banks and financials are trading at historically ridiculous levels (cheap).  If you think that the banks will fail and that the dollar will be worthless buy gold and silver, if not I would be buying what no one else wants.  The markets reward the patient contrarian.  The time to buy precious metals was a few years ago.  Try and find the "Gold" of 2011 in todays market and buy that.

Good luck!

Answer 2

I would sit back and relax. I would wait for a pull back in commodities as a whole if that is what you want to invest in. There has definitely been a run up in gold, silver and copper. I would wait to see how our economy is going to go because many people think that the dollar is going to go up. I would also wait to see how the other global markets are going to play (ie-china, brazil, etc). They are the ones that are consuming a lot of commodities and if they start to slow down on their consumption then these commodities may be in trouble. I think that the commodities will continue to go up but I see a correction in the future that will be a great buying opportunity. A great book to read is Hot Commodities by Jim Rogers. He discusses the future of commodities. He was a partner with George Soros originally in the Quantum Fund and is a smart financial mind. There are many other investing opportunities with a lot of upside out there.

Answer 3

The pendulem swings back and forth.  "always"