5 Reasons to Buy Gold (and silver)

I brought these reasons up last year. Another writer wrote almost identically the same reasons. I give credit to him (Tyler Durden) for the list below. His wording was better than mine.

Either way, I thought it was important to list them again for 2 reasons. 1) To show that we aren't too far off of what is happening exactly in our world today. And 2), that with the price of silver and gold so low, it's a good time to buy. The list below is quoted as buying GOLD, but everything about the list applies to silver. One doesn't move usually without the other. But when they move UP, Silver almost ALWAYS outperforms gold.

CYA: SE:

Five Reasons to Buy Gold (And Silver) in 2015

1. The most important reason to buy gold in 2015 or any time, for that matter, is diversification and as an insurance against uncertainty. I was always told to have 5% to 10% in gold and pray I will never need it. In these dangerous times we live in and with the risk of a major event like a war, revolution or financial collapse, it is wise and prudent to have some of the gold and silver outside of the banking system.

2. Gold is now at a very low level and oversold. I don’t expect gold to go below $1,000. In the case of a sideways market, gold will move between $1,100 and $1,500. If gold doesn’texplode in 2015 it will still move slightly up.

3. Central banks are and will continue to buy gold and I even expect them to accelerate their buying, competing for a limited amount of gold and pushing the price up. Silver will follow gold as poor man’s gold. Central banks have been in currency wars since 2008 and they will end badly. Both Russia and China are using gold in their currency wars. A reset of the current monetary system will push gold easily to $5,000. An announcement by China of its gold reserves could get gold to test $1,900, and even $2,000, in 2015.

4. I often hear that there is no risk of hyperinflation but of deflation, therefore a negative for gold. What people ignore is that a deflationary environment is catastrophic to the banking system and excellent for gold. In a collapse of the banks, gold and silver will circulate since they are the most marketable real assets.

5. In the case of hyperinflation, which is also a high probability and can come after a short period of deflation, gold will outperform or, at least, maintain its value in real terms. In this case, $10,000 in nominal US dollars is not absurd.