Last week was a crazy ride for silver. Silver almost hit $30 and Gold soared past $2000 all the way to $2060. It was a wild ride for both Silver and Gold last week. My $AG and $SLV calls went through the roof. Well, since I didn’t have that many positions, I was only up around $550 throughout all investments. With Silver and Gold mooning like crazy, it was bound for a correction. And that correction happened. What drove up the prices of precious metals? With the falling U.S. dollar, investors looked to buy precious metals during these economic times.
So yeah, as you can see the charts above provided by BuillionVault, precious metal prices for both began to slowly correct itself throughout the weekend. Gold dropped around 5.3%, while Silver dropped 13.8%. RIP to all of my gains. Personally I would say this would be a good time to buy some precious metals. It’s always better to start diversifying your portfolio and stop having cash all the time.
Analysts have contributed to the reason causing the price drops is due to the “drop in rates, a steady increase in inflation expectations and a falling U.S. dollar.” (CNBC) Other analysts have assumed that the production of the vaccine has led to the slight decline in precious metal prices. With everyone being aware that the U.S. dollar almost holds no value, why hold cash when you can buy intangible/tangible objects that can generate a better return than cash.
Gold got the worst outcome of all. A couple hours ago, Gold hit below the $1900-an-ounce level, which is supposedly their “biggest two-day drop in more than seven years” (ALJAZEERA).