I like the use of ‘justify’ on the actionable part for precious metals (PMs). From a person who had bought and held precious metals and coins since 1992. Mine are ‘justified ‘as being collectibles bought when prices were cheap. I was picking up BU Peace Dollars from around $6, Morgan silver Dollars for $10 and above, Johnson Matthey 10oz. silver bars for under $4 an ounce, and the 1981 dated 10 oz. “U.S. Assay” bars that broke the Hunt brothers. it is a hobby first with appreciation being a byproduct second.Seems like a classic rally driven by fear of geopolitical uncertainty. Things really kicked off after the tariff scare last April, but were in motion from early 2023. This was shortly after global inflation was clearly coming down from the recent 2022 peak, so we can't even use the whole "inflation hedge" rationale that is often proclaimed.
The price action would seem a bit more plausible if gold/silver held a central role in the AI boom or somewhere else in the real economy. So is there some kinda justification I'm missing here or am I somewhat right in my belief that it's just a fear-driven speculative frenzy? Who here is currently holding gold/silver and can they justify their position?
The last gold I bought was in 2001 and the last quantity of silver was in 2005. At that time, PMs represented 8% of my portfolio. These days with the higher metals prices, it represents just 4.5%. This includes the near 30% increase in the first nine trading days of this year.
Let me ask this to those responding with the typical ‘reasoning.’ How much gold and silver had you held since 1999 to the end of 2019? Why buy now? I see many will use geopolitical and inflation reasons as to why, but past decades have proven this thinking wrong.
•The 1970s hyperinflation causing PMs to soar in the late seventies to early eighties never went away. There was no deflation that counteracted it and it remained through the PM lows of the nineties and 2000s.
•The 1990 invasion of Kuwait and its oil fields with the next move north to Saudi Arabia that led to a shooting war barley moved PMs as silver dropped below $5 and gold was in a $370-$415 trading range.
•The 2001 attack on the lower Manhattan financial district including the destruction of the Comex vault at 4 WTC. Silver went from $4.18 to $4.70 and briefly hit $5 in 2002 only to go back to $4. Gold went from $273 to $295 range and could not break $300.
•While the GFC is also another reason, PMs were moving higher before than happened and dipped in 2013 once various QEs and ‘interventions’ lowered prices until the end of 2016.
I think most people are kidding themselves and do not want to simply admit and say, “Because it has gone up so much and I do not want to miss out!” much like when they were speculating in dotcom stocks, real estate, oil, and thing-o.
Statistics: Posted by Hacksawdave — Sun Jan 18, 2026 10:49 am — Replies 25 — Views 1442