I am finally finishing my tour of Asia and returning to Canada this weekend, but seeing how this market is unfolding, I had to comment on what is happening. I have received numerous emails and calls asking me what is happening after the market panicked, reflected, and reacted.
In my last market update, I specified that everything would be guided by tariffs: increases, retaliation, and postponements. In recent days, we have seen a mix of all of these—increases, retaliatory tariffs, and tariff postponements—and the market has been reacting to all of this. As I have seen many times in my nearly 15 years in this industry, when there is uncertainty to the degree that these tariffs have brought, the reaction is panic and “throwing the baby out with the bathwater.” The initial reaction was to sell everything and anything that could be sold and move into a cash position. During this initial phase, both commodities and stocks around the world plummeted as the dollar rose. All the while, as gold and silver were being hammered, I watched the gold-silver ratio go from 92 to a high of around 105. I stand firm in my position and point out that the ratio is high and that, in my opinion, silver is greatly undervalued.
Now we see gold at all-time highs (again), all due to uncertainty. The market has reflected on what is happening with tariffs and has reacted by selling dollars and buying gold. This is how I explain gold and precious metals as part of a balanced portfolio.
Now we see gold at all-time highs (again), all due to uncertainty. The market has reflected on what is happening with tariffs and has reacted by selling dollars and buying gold. This is how I explain gold and precious metals as part of a balanced portfolio: if you buy a new car, you can't drive it off the lot without car insurance. You pay for it every month and you may never even use it, but when you have an accident, it's there. This is the same mindset you need to have with gold and precious metals. You buy them as insurance for your overall portfolio, and when uncertainty strikes (as it has now), they do their job. So far this year, gold is up over 23%, and as things stand, a price of $3,500-4,000/oz doesn't seem far-fetched.