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Market Comments from Jerry Williams – Jan. 3, 2014

It’s time to assess the metals markets after a brutal performance last year with losses on gold from $1,674 to $1,202.30 and silver from $30 to $19.37, the worst performance in 30 years and the first losing year for gold in 13 years.

Every rally held hope for a price recovery only to be knocked down by short sellers in the futures markets and ETF sales by panicked investors and hedge funds.

In our market, the physical market, where the actual metals are traded, there was more buying by our clients than selling all year long. Other dealers report the same. Only tax loss selling to us during the last week of the year exceeded retail buying.

Obviously, something is out of alignment when the mints are producing record amounts of coins to meet the demand and yet the prices keep declining.

We just have to accept the fact that there are powerful forces aligned against gold, and by proxy, silver. Witness the overwhelming negative sentiment from brokerage houses and the media.

The average investor, influenced by analysts and financial advisors, is not going to be in our markets for some time, until spooked by a shock to the dollar or traditional investments.

So, we accept reality and use these, basically bargain prices, to establish or add to our long term survival portfolio. Not to be traded or sold out on the next rally. This period is not a repeat of 1981 to 1999 with double digit interest rates and a sound dollar.

The so called “strong dollar”, touted by the financial press, due to the much anticipated Federal Reserve’s tapering down their bond and mortgage buying by $10 billion a month, will be short lived, in my opinion.

Gold will continue to be transferred from West to East until there isn’t any left. We need to continue to press for an audit of the Fed and Fort Knox. Failure to do so will only increase doubt about our country’s financial stability.

Keep the faith.

Jerry

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