The metals market continues hobbling along as news story after news story brandishes bad news in the form of rising COVID-19 infections, a collapsing Afghanistan, and persistent inflation. One would think all of the miserable headlines would literally draw investors to gold and silver like honey does flies, yet the stock market tickers keep putting on a good show and conventional paper investments are offering their followers at least hopeful news.
Of course, overall those could be considered good tidings. After all, who really wants to live in a time and place where gold and silver are breaking price records only because of economic tragedy? But it’s nevertheless confounding for some to understand the reluctance for gold to break a threshold of $1,800 or even $2,000 or why silver is closer to $20 than $30 an ounce right now.
The dollar stays relatively strong and confidence remains high that inflation is more a temporary issue linked back to supply-side shortages than portending a long-term slog like we saw with stagflation in the 1970s and early 1980s. But this doesn’t mean it’s a bad idea to build a hedge against inflation — even slow, long-term price increases more indicative of an expanding healthy market — with bullion.
Gold and silver have both shown strong positions in recent years, and they have offered no signs of regression back to the price levels of the mid 1980s through early 2000s, when gold was trading between $300 and $500 and silver kept south of $9. This is not to say that precious metals won’t founder, but history has proven time and time again that bullion remains buoyant over the long run, even when times are bad or — as they seem to be right now — confusing.