Gold's (And Silver's!) Time Has Arrived

Peak Prosperity publishes ALERTs very rarely, and only when my co-founder Chris Martenson and I are concerned enough to take personal action.

On May 8, I released an ALERT informing our premium subscribers that, concerned by the ramifications of the global central banks’ response to the coronavirus, I was moving a material percentage of my portfolio’s cash reserves into precious metals, notably into silver as the gold/silver ratio then of 110:1 remained near a record high.

Since the issuance of that ALERT, gold has broken above it’s previous all-time high price, moving up 14%, from $1,717/oz to $1,950/oz.

And silver has performed strikingly better: rising over 55% from $15.75/oz to $24.50/oz. As anticipated, the gold/silver ratio has fallen nearly 30% to 80:1.

However, much more important than this near-term pop in the precious metals is their outlook going forward.

We’ve been writing for years here at about gold and silver’s extreme undervaluation given the risks we’re facing in our monetary and financial systems. And yet, for years, the metals languished as capital flowed eagerly into “paper wealth”, fueled by central bank liquidity, record low interest rates, and a rampant increase in debt and deficits.

Back in 2017, Grant Williams famously and correctly nailed the neglected state of the precious metals in his prescient work, Nobody Cares.

A year ago, as gold managed to break above it’s longtime ceiling of $1,350/oz, we began loudly alerting our readers that the years of neglect were finally over. That, indeed, investors were beginning to “care” again.

Fast forward to where we are today, a pandemic and +$5 trillion in global central bank liquidity later, and now it’s seeming that suddenly Everybody Cares about the precious metals.

Gold’s – and silver’s – time has arrived. Precious metals are finally back in a secular bull market.

Key questions to address at this moment are:

  • How much further are prices likely to move from here?
  • What are the odds of a price correction in the near term, given how far and how fast prices have moved recently?
  • How well-positioned are you to take advantage of this bull market in the metals?

Fundamentals: Higher Prices To Come

Money Printing/Inflation Concerns

More currency = inflation. Milton Friedman famously and correctly stated: “Inflation is always and everywhere a monetary act”.

Well, since March 1, the US Congress has already approved nearly $3 trillion in legislation (with another $1-3 trillion on the way, depending on which political party’s plan gets passed). And the Federal Reserve has already expanded its balance sheet by over $2.5 trillion, with forecasts of another $2+ trillion being added later this year:

<img class=“aligncenter wp-image-576137 size-large” src=“” alt="“Projected 2020 Federal Reserve balance sheet” width=“1024” height=“602” />

And that’s just the US. The rest of the world is following suit:

<img class=“aligncenter size-medium” src=“” alt="“Global monetary policy chart” width=“1000” height=“415” />

Billionaire seasoned investors like Paul Singer, Ray Dalio, and Paul Tudor Jones are now raising loud concerns about the diminishment in purchasing power all of these new freshly-printed trillions will have on national fiat currencies. When big dogs like these, who have feasted on and benefitted magnificently by the status quo over the past decade, fret about about the central banks “printing too much”, you know it’s time to worry.

TINA (There Is No Alternative)

In today's environment of zero-to-negative interest rates, big financial institutions and pension funds aren't able to get a meaningful return on the bonds the hold in their portfolios:

The absence of yield is forcing portfolio managers to diversify into gold. While gold also has no yield, it offers a hedge against today’s extreme valuations in equity and bond prices, as well as powerful purchasing power protection:

Gold’s Record Rally Fuelled by Unlikely Buyers (Bloomberg)

July 29, 2020

“Safe government bonds have always played a very important role as a portfolio diversifier and will continue to be, but we have to recognize that their potency is diminishing due to the low absolute level of yields,” said Geraldine Sundstrom, who focuses on asset allocation strategies for Pacific Investment Management Co. in London.

“We need to diversify our diversifier and look for safe haven beyond government bonds. Given Pimco’s view that rates will be kept very low for years to come causing depressed levels of real yield, gold feels like an appropriate diversifier,” she said.

Pimco, which manages $1.9 trillion in assets, is far from alone. In a May note, Citigroup Inc. cited “new non-traditional investors in bullion, including insurance companies and pension funds” as part of the fuel behind the rally.

As we've been educating readers about for year, it's very important to note that gold -- and especially silver -- is extremely underowned as an asset class even though the investable markets for the metals are much smaller than many realize. It will only take a small percentage of the world's capital to shift from stocks and bonds into the metals to send their prices soaring much higher:

“There has definitely been more widespread institutional ownership of gold than in previous rallies,” says John Reade, chief market strategist at the World Gold Council. “Gold’s in the conversation now with much more investors than it was 10 or 20 years ago.”

Even so, gold ownership among the professional class is viewed to be low. The total value of investor positions in gold futures and exchange-traded funds is equivalent to just 0.6% of the $40 trillion in global funds, according to UBS Group AG strategist Joni Teves. That position could easily double without the allocation looking extreme, she wrote in a note.

Reade, who previously worked at hedge fund Paulson & Co., reckons no more than one in five institutional investors has an allocation to gold.

The world's privately-held gold bullion amounts to $2.5 trillion, with much of it tightly held by investors not looking to sell anytime soon. If just a few of the large institutional funds not currently invested in gold decide to start accumulating, gold will quickly become known as "unaffordium" (hat tip to's Mike Maloney).

Silver is much crazier. Since most of the silver ever mined has either been commercially consumed or used for jewelry/religious purposes, private above ground stores are tiny: about $48 billion (that’s with a “b”, not a “tr”). Even if we add to that all of the $17 billion or so in annual silver expected to be mined this year, that’s only $65 billion.

It would take only a few billionaires taking a stake, or the tiniest amount of demand shifting from the $20 trillion US Treasury market into silver, to convert the metal into “unobtanium” (again, hat tip to Mike).

Technical Analysis: A Short-Term Pullback Likely

With such a large advance happening so fast, a short-term pullback in the prices of gold and silver are probable; even welcome.

A 10-15% correction would keep the price action from becoming overheated and turning into a blow-off top, which typically gives up most of its prior gains. Also, such a modest correction would give investors opportunity to enter the market/add to their positions at lower prices.

Cup & Handle Formation?

Most technical analysts see gold as in the process of forming a massive multi-year cup and handle pattern. Once the "cup" is formed, a minor cooling off period follows (the "handle"). After the handle is complete, a climb to new highs usually occurs.

Here’s a classic example of a cup and handle pattern:<img class=“aligncenter size-medium” src=“” alt="“classic cup and handle pattern” width=“3274” height=“2074” />

And here’s gold, along with a projected price zone should a handle indeed follow next:

Should a handle develop and then complete, gold’s price could easily be in the mid-$2,000s (or higher) in short order.

Weakening Dollar About To Strengthen?

Another reason to be prepared for a near-term price correction has to do with gold's trading correlation with the dollar. Most of the time (but not all of the time!), gold trades inversely to the dollar.

Gold’s big run-up from $1,500 to $2,000 over the past few months has occurred alongside a sharp drop in the USD. Should that reverse, it would not be surprising to see gold fall as the dollar rises.

And we can see in the chart below that the dollar is now hitting the bottom of its multi-year trading range, which could likely serve as support for it to bounce off:


So caution is calling us to expect a short-term price correction in gold and silver before we expect to see new record highs later on.

What Investors Like You Should Consider Doing Now

Jeff Clark, senior precious metals analyst at, estimates that we are only entering the second inning of this new secular bull market. "The really big gains still lie ahead", he predicts. (you can hear a lot more from Jeff in this video, recorded today)

So, what should regular investors like you be considering at this moment?

Here are our recommendations, though it’s important that we make it absolutely clear this not personal financial advice. As always, we recommend working with a professional financial adviser to build an investment plan customized to your own needs and objectives. (If you do not have a financial advisor or do not feel comfortable with your current advisor’s expertise with gold or the market risks we discuss here at, consider scheduling a free consultation with our endorsed advisor)

All right, with that important caveat out of the way, here are the steps we think worth seriously considering:

If You Don't Own Any Gold or Silver (Step Zero)

If you don't own any, then buy some now, whatever today's prices are.

Precious metals first and foremost are insurance against financial/monetary crisis. Just as you wouldn’t drive your car without auto insurance, you don’t want to neglect adding this crisis insurance to your investment portfolio.

So get your initial precious metals position in place now. And start sleeping better knowing you’ve got that protection in place.

For guidance on where to purchase bullion (we particularly like the Hard Assets Alliance and its metal storage solutions), what form to own it in, and where to keep it, read our free Primer On How To Buy And Store Gold & Silver.

If You Already Own Precious Metals (Steps 1-3)

If you already hold gold and silver in your portfolio, pat yourself on the back. You've likely enjoyed watching the recent price run-up.

Here are the steps we recommend you consider now:

  1. Explore options for protection against a short-term price correction in the metals. Stops, puts, covered calls -- these are all ways to hedge against lower prices. Don't try using these yourself if you're not already well-experienced with them! Work under the supervision of a financial advisor with deep expertise using these, who can craft a hedging strategy appropriate for your portfolio and your goals. If you don't already have such an advisor, click here to schedule a completely free, no-obligation consultation with Peak Prosperity's endorsed financial advisor.
  2. Create a regular program to increase your position over time. The best way to accumulate precious metals is to do so over time, letting the power of dollar cost averaging work for you. The Hard Asset Alliance's MetalStream program is our favorite solution for this, as it automatically purchases gold and silver for you at the ratio you want on the frequency you want. But, if preferred, you can certainly create your own DIY program if you have the discipline and don't mind the hassle.
  3. Determine if and how you want exposure to precious metals mining companies. When gold and silver prices rise, the shares of the companies that mine these metals tend to rise a lot farther. Owning shares of precious metals mining companies can be very lucrative; but you can easily lose a lot of money, too. If you're interested in exploring gaining exposure to mining shares, first read Jeff Clark's free guide on the topic and then talk to your financial advisor (or schedule a free consultation with the one we endorse) about how best to put this into action in your portfolio.
2020 has proven to be a year unlike any other. It has shaken our confidence in our economic, financial, political and social systems -- proving them to be a lot less stable than we'd previously assumed.

Gold’s re-pricing is reflecting that realization. The big question is: How much more uncertainty remains ahead?

The financial markets remain ridiculously overvalued. The Federal Reserve and the world’s other central banks are hell-bent on continuing to print more $trillions. In the US alone, tens of millions of households have lost their income, while daily deaths from the coronavirus continue to hit records on a daily basis. The upcoming US presidential election is certain to be hotly-contested, should it even happen.

The reality is that the future is packed full of uncertainty. And more uncertainty will drive the price of gold, and silver, higher. Likey much higher – as Jeff Clark reminds us we’re still in the early innings here.

Use the time now to get smartly positioned.


This is a companion discussion topic for the original entry at

Good article, Adam, and I mostly agree.
Though, I note the cup and handle chart may give readers the impression that gold’s “handle” will form out until 2022; I find that very unlikely given the increasing dollar debasement and acceleration of the deterioration of the financial landscape, and of society in general.
I made the difficult decision to part with a large portion of my physical gold holdings yesterday. Not only because of the expected pullback in gold prices, but because miners will outperform, and act as leverage to the underlying metal. that will be the place to deploy capital for outsized returns once the correction seems to be over.

Found out I’m most likely losing my job on Monday. My call for now or 6 weeks from now.
Pulling off the band-aid now for the extra time it affords me and the hope of better severance before rounds 2&3 start up. Been nice living the 6-figure dream, wonder what fulltime farming is like…
Severance and 401k withdrawl are going into land and gold, adding to my recent Au acquisitions last month @$1800 per (thanks PP for saving the value of my minimal wealth with your advice).
I gotta ditch this suburban lifestyle and increase my living and garden space to acreage now and quick. This is going to be a real high-wire act. Grab a property that I can pay cash for and then sell my house to get out whatever equity I can retain.
Hope my Madison, WI bedroom community retains its value long enough as I attempt to transition more rural. I don’t see any net under this tightrope either.
In other news, Dunkin Brands is closing up 800 locations (easily 3000+ jobs just evaporated, employees and distributors alike), 650 corporate real estate and logistics employees in Bentonville, AR at Fortune 1 are getting the boot and 9.5% of the GDP shrank (doubt that’s accurate, seems way low) between April and June.
It appears Herman Cain most likely caught COVID while campaigning for Trump and not wearing a mask. And died.
Oh yeah, almost forgot, there was a Tweet from someone “important” that floated the idea of suspending elections.
Fascism has a checklist and it finally finished that list here in the US:

Right now, Robert Hunter is the only thing I can find to help me thru:
Small wheel turn by the fire and rod,
Big wheel turn by the grace of God,
Every time that wheel turn 'round,
Bound to cover just a little more ground.
The wheel is turning and you can’t slow down,
You can’t let go and you can’t hold on,
You can’t go back and you can’t stand still,
If the thunder don’t get you then the lightning will.
Bring it on universe. I’m as ready as I’ll ever be.

By far, the biggest driver for the precious metals is negative real interest rates. The USD is very noteworthy as any significant drop will certainly put a floor under the metals and will likely drive them higher.
Here’s a link to Treasury real yield curve rates
The USD has been dropping fairly rapidly, and the metals went up very rapidly especially over the month of July. I get the distinct sense both gold and silver are (still) being manipulated lower than what they would be naturally. The manipulation has long been suspected by many, but just this past week there have been examples. Look when gold/silver spiked July 28, and then were immediately slammed down, and have stayed down the past few days despite lower real interest rates, lower 10yr yield, and a sharply lower USD. Also, last Friday gold and silver prices were managed down at the last millisecond such that the closing prices were $1899.95 & $22.997…seems like more than a coincidence that both numbers were ridiculously close to the big round numbers, but they weren’t allowed to as the financial headlines over the weekend would be psychologically different. Today, the 10yr was down significantly and the USD was crushed, yet gold was down and silver was slammed…for no clear fundamental reason. I think TPTB don’t want a disorderly run up in metal prices, especially given what looks like a fairly disorderly drop in the USD which has showed no signs of abating…and the negative real interest rates becoming even more negative.
The reason I say all of this is that I would be cautious with expectations regarding timing of the metals going up. This current financial environment is about as fundamentally bullish for gold as it gets…reasons above, Fed’s balance sheet skyrocketing with no end in sight as there are so many future bailouts that will be coming, etc. Industrial demand for silver could drop if CV19 grinds the world economy lower & lower, but monetary demand is extremely bullish. Expect volatility, especially with silver & mining stocks. I think a long time horizon is best as there may be some manufactured drops in prices to deter people from buying. The Fed/TPTB want peoples’ monies to be headed into asset classes of their choosing such as the stock market, bonds, etc. They HATE gold/silver. Trading the metals should be avoided…you will get burned. Buy & hold.

Don’t forget that 10 years ago gold hit $1900, silver $50, and everyone was jumping on the bandwagon, myself included. I remember the few alienated voices warning it was a setup get trammelled and ridiculed. But they were right.
What concerns me here is that precious metals prices are still completely determined by digital derivatives. I’m not expecting prices to really move until a physical default happens. So then why are digital prices going up? Probably as explained, increased institutional interest. But that is also digital. What’s stopping TPTB from just printing up 10x more digital gold to meet 10x more digital demand, and bring prices back down?
I don’t expect another 10 year wait is in our future but I’m hesitant to buy into this rally. May just be another sucker punch. Just like TSLA never really crashes, because fundamentals just don’t matter anymore. And that’s still the case while the digital financial system rules.
I’m lucky because after being low on work for a few months I’m back on a job designing a pure silver mine (with a bit of gold), which is rare since most silver mined is a byproduct of industrial mining. So every dollar that silver goes up improves my job security exponentially. This job is going as fast as possible for obvious reasons.

Yes, I’m holding Gold and Silver, 20%. To not have factored for this would have been a grave mistake. I still do not believe however we are near collapse, years, maybe decades still. I hope. Whatever… Peace

Owning 5%-20% of PM gets tossed around a lot. But the question is: % of “what”? NW or investments?
I prefer 10% of investment and always get physical. What good is PM as insurance if you don’t have it in hand when the SHTF?
PM has no yield. But at only 10%, if the other 90% is kept in dividend-paying stocks/rent-generating real-estate it has a very nice yield and thus slowly grows irregardless of PM prices.

I have tried to query older colleges that had to weather collapse of governance around them; usually with some sort of overlord: Japanese occupation of Hong Kong, internment camps; civil wars; and the things that retained useful value were a bit unexpected (soap was one of them!), and precious metals due to their weight and bulk and dearth of exchange-abilty for food or survival did not rank highly (as I was expecting) as they require a trading platform. It maybe it is like earth quake preparedness; being prepared for a 6, 8, or 9, +or- tsunami, are all quite different.

Coin stores and pawn shops are the new hottness, the cool place to be in the 110 temps. The local news stations are running segments on the “new gold rush”, the "we will buy your gold and silver "ads are starting to pop up also. Business in the shops seems to be flowing in both directions, sellers cashing in…buyers scooping it up… with silly premiums in play for the brokers. One local shop took in 6 monster boxes of SAE’s…and had them all sold within an hour @ 15k/each. Lot’s of fake crap from China also coming in. Buyers seem to be younger, which is to be expected I guess. Withe the $600 extra unemployment running out, I wonder how that will effect the pawn shop traffic.
Interesting re-reading that May 8 alert, and the comments as well…

Pappy said “I don’t see any net under this tightrope either.”
Brother, I don’t envy you the moment in which you stand. But I will say this: you will discover gifts and strengths you never knew you had as you walk the road out of the place in which you stand. Adjust expectations. Stay present in the moment. Call on the people around you. You’ll need them. And they, you.
I’m about 12 years into a journey similar. It’s the best time of my life yet. I wish for you the same.
May Fortune smile upon us all!
VIVA – Sager

I gotta ditch this suburban lifestyle and increase my living and garden space to acreage now and quick. This is going to be a real high-wire act. Grab a property that I can pay cash for and then sell my house to get out whatever equity I can retain.
Hope my Madison, WI bedroom community retains its value long enough as I attempt to transition more rural. I don’t see any net under this tightrope either.
I was in a similar position when I first twigged to the big picture of the end of growth and its implications. I was a business professional in a city and realized I needed to sell up and get into a rural homestead. Luckily my wife was on board. It took over a year to sell up and make the move. Now, 10 years later we are well established on some land in the country with orchard , vege gardens , chickens and a few animals.
In the time it took to sell up and move I was shitting myself. I thought things were going to happen much faster than they did. I actually felt guilty about selling the old place because it was not ‘resilient’. But it was just what the buyer was looking for. And the thing is most people still have no idea whats coming down the line. So hold your nerve - list your property for a realistic price, someone will want it - and work your plan to transition to a new life. Congratulations on making the decision.

[Also cross-posted in the daily PM thread]
Again - I know, I know - I’m talking again about the Comex default that never happens and is never gonna happen!
But then again…
August is a tame month for gold and nothing ever happens. Ever. September and December are always the hot months for contracts.
Except in 2020.
Check this out:

A record amount of first notices stood for delivery. In A.U.G.U.S.T.
My friends, that is very notable! As in, this time may be different.
We shall see…

If the managers decide to throw a COVID bonus our way again, I will again take the remainder of the $2400 (Aprox. $800) and put it into PM like the other one. I do this any time I by chance get a tax refund from Fed or State as well. Turn their monopoly money into something real. Also half of any work bonus I have ever received has been turned into real assets, PM, land, real tools.
Although I am a GenX’er, I have heeded the stories and lessons of my late grandparent’s life growing up in the Great Depression. Yes you need to be resilient and be able to take care of yourself and those close to you, but there also might be great opportunities presented as we reset to whatever is next.
Stay strong, be resilient.

I had a consultation with Justin at New Harbor yesterday. Very impressed! Somehow I had forgotten about the 28% capital gains tax on PMs. I had hoped I could sell one PM and transfer it to another one in a like-kind exchange but that isn’t possible.
There is no way to offset this fixed 28% tax rate unless I am seeing something. I wonder if the government might raise the collectibles tax rate to discourage people from holding PM. Any thoughts?

Some people choose not to declare every dollar that comes into their hands.

There is no way to offset this fixed 28% tax rate
When buying physical PM, many buy local from friends which is easy when dollar cost averaging, because then one is aselling when everyone wants to buy, and vice versa. If the average US citizen starts to become less trusting of government (say like say Russia or China folk are) we will see more demand in the private space. Much of our immigration is currently from nations who are not as "trusting" as traditional American boomers are, so the black market is likely the future (think Mexico, for how Americans may view government in say 20 years). America is changing fast. But operating in the local market is all about relationships, and these cannot be built overnight.

Paul Tudor Jones buys BTC

strategy of investing in reinsurance seeks to offer investors:

  • Higher return potential, similar to stocks or high-yield bonds
  • Bond-like return mechanics, but without interest-rate risk or economic sensitivity
  • Diversification benefits due to very low correlation with traditional asset classes
Is this just another risk on investment?

There was a group of Chinese scammers who were dumping BTC when the price hit a certain level. It was depressing the price. They are now in jail. One barrier to the bull run has now been removed. Number of accts. are increasing. Institutional investors are moving into the space. Crypto has been declared “money” by the Comptroller of the currency . Make of it what you will.