Buy gold and silver coins and bars for delivery and storage has advocated a leading Irish financial adviser. Eddie Hobbs has given advice to his clients and says that they should buy silver and gold bullion in order to protect from the coming global financial crisis.
In his most recent research report, ‘Outlook, May 2016’ he said that
“Not holding gold is now, in my opinion, high risk. Gold is the single asset class that protects both against deflation and especially against inflation. The case for gold against this backdrop has strengthened and not weakened.”
Below are the key excerpts from the excellent report regarding gold and silver:
OWN SOME GOLD
As a financial practice we have been recommending gold to our clients since 2005. Gold prices peaked to $1,900 an ounce before declining to the current trading range of between $1,000 and $1,300, i.e. approximately €1,100 at current prices.
The nominal value for gold, if there was a gold standard implemented, would be between $7,000 and $9,000 an ounce, it has been calculated.
This does not mean that gold could go to these prices, but what it does tell us is that it has the potential to go to these values in the event of a loss of confidence in global currencies, especially the US Dollar.
Gold is not an investment, but rather a hedge, and insurance against the potential for substantial falls in other parts of your balance sheet. As a general rule we recommend that between 5% and 10% of liquid assets are held in gold.
We had discontinued recommending clients holding gold from 2012 to 2016 and, once again, it forms the mainstay on all client recommendations for good reason: Gold should be considered a form of money, a The value of gold as against the Euro is outlined in the tables below: 2005 + 36.7% 2011 +14.2% 2006 + 10.6% 2012 + 4.9% 2007 + 18.4% 2013 – 31.2% 2008 + 10.5% 2014 +12.1% 2009 + 20.7% 2015 – 0.3% 2010 + 37.1%
We first started adding gold to client portfolio recommendations in 2005, when gold was about €300 per ounce, and stopped about three years ago. Gold, having spiked up to €1,370, is now hovering around €1,100 per ounce and once again looks like reasonable value set against the above backdrop risk.
HOLD SOME SILVER COINS
Holding a small amount of cash or gold and silver coins at home makes sense provided you’ve allowed for the security risks. This is on the basis that the existing banking system may be closed and that access to cash may be limited as it has been for periods in Greece and in Cyprus after their financial crisis. Although this was not a feature of the financial crisis in Ireland, it did come close to it.
In the event of a general loss of confidence in major currencies, especially the Dollar and secondarily the Euro, holding physical silver coins makes a lot of sense. Silver does not move in step with gold in the short term but in a severe deflationary event and a loss of confidence in paper currencies, having silver, which comes sat lower unit values to gold is attractive.
An ounce of gold by May 2016 is worth just over €1,100 ($1,270) while an equivalent weight in silver is €15 ($17). <See prices below>
Gold and Silver Prices and News
Gold holds gains; caution prevails after Fed rate talk (Reuters)
As Brexit, Trump Multiply Global Risks, Gold May Rally to $1,400 (Bloomberg)
Gold Gains on China Debt Concerns as Soros Stake Boosts Miners (Bloomberg)
Gold prices rise as dollar, U.S. stocks ease (Reuters)
China ICBC buys secret gold vault London (Business Insider)
Why Gold Is A Better Investment Than Apple (Forbes)
George Soros Is Making a Big New Bet on Gold (Fortune)
“They Are Scared To Death” – CEO On “Biggest Reason” Why People Buying Precious Metals (Zere Hedge)
‘Audit the Fed’ movement taking big step forward in Congress this week (CNBC)
Gold Demand Just Had Its Strongest-Ever First Quarter (Gold Seek)
Gold Prices (LBMA AM)
18 May: USD 1,270.90, EUR 1,127.21 and GBP 882.05 per ounce
17 May: USD 1,270.10, EUR 1,121.43 and GBP 877.50 per ounce
16 May: USD 1,281.00, EUR 1,132.04 and GBP 892.87 per ounce
13 May: USD 1,275.15, EUR 1,123.51 and GBP 885.16 per ounce
12 May: USD 1,268.30, EUR 1,111.30 and GBP 878.28 per ounce
Silver Prices (LBMA)
18 May: USD 17.05, EUR 15.13 and GBP 11.77 per ounce
17 May: USD 17.08, EUR 15.09 and GBP 11.80 per ounce
16 May: USD 17.32, EUR 15.30 and GBP 12.07 per ounce
13 May: USD 17.09, EUR 15.06 and GBP 11.85 per ounce
12 May: USD 17.23, EUR 15.12 and GBP 11.91 per ounce