Gold and Silver Begin to Bottom Out at Oversold Levels

After melting down for three weeks straight, gold and silver prices are oversold and finding support at nine-month lows thanks to short covering and bargain hunting — even as the U.S. dollar continues to strengthen. This suggests precious metals are forming a significant bottom, market technicians say. Meanwhile, traders await the February employment report due Friday to assess whether the Federal Reserve has reason to taper its aggressive monetary stimulus program, known as quantitative easing, or QE.

Although investor demand for gold ETFs may have dropped, interest in gold bars and coins is exploding, dealers say.

“Remember Russia imported 600 tons of gold last year, central banks are continuing to buy and China is near passing India as a world gold importer,” Terry Sacka, chief strategist at Cornerstone Asset Metals in Palm Beach Gardens, Fla., wrote in an email. “The U.S. mint sold more silver in February than four months combined last year. They actually stopped selling for a period and have raised prices. That doesn’t sound like a market softening, just shifting.”

The gold bugs contend the underlying fundamental reasons to own gold remain the same.

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Precious metals have always been a safe haven for investing in high inflationary times. Historically speaking, a recurring cycle that always seems to repeat itself is periods of high inflation as a precursor to the crash of paper currencies. Those who understand this wealth cycle and position themselves in gold and silver are those who prosper. Precious metals are assets that will never lose their value. They are not subject to systematic risks as paper money and serve as a hedge against inflation and other threats of devaluation. Cornerstone Asset Metals was established to help guide investors safely in and out of the precious metals market.

Learn more about how buying gold and silver today is a smart move for your investment portfolio.

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» Read our article: Why Silver is Going Up Today?

» Read our article: Why Gold is Going Up Today?

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