If volume trends are anything to go by, the current level for gold prices may represent the last chance to get bullion at discounted rates. While the precious metals complex continues to underwhelm in light of alternative investment vehicles, sentiment among astute buyers is rising. Average trading volume for gold bullion hasn’t been this high going back at least five years.
Similar trends can be seen for silver prices. Again, silver markets are suffering a disappointing year in 2017 after 2016 looked so promising. However, we’re witnessing a substantive rise in trading volume since January of 2015. Although no one is going to argue that precious metals are robust, the added volume is concurrent with technical stability in the charts.
Interestingly, as the benchmark Dow Jones index continues to register record points after record points, the overall volume has been fading. We’ve been witnessing this development for years so it’s no surprise. However, with the coming advent of the Gen-Z demographic entering the workforce, the Dow Jones will further suffer as a) more baby boomers pull their money out of the markets, and b) the oldest members of Gen-X slow their capital contributions.
Furthermore, Gen-Z represents the children of the information age. They have zero recollection of an era not tethered to digitalization. Thus, the Dow Jones is a foreign agent. Instead, they’re much more likely to invest in vehicles they and their peers understand, such as cryptocurrencies.
While this dynamic is occurring, both gold prices and silver prices have a solid chance of a longer-term recovery. Retirees selling their stock holdings for cash is obviously a deflationary or bearish event; indeed, we may be on the cusp of one of the biggest bear market cycles in U.S. history. If so, the security of physical assets will be a welcome safe haven for astute investors.
Even if cryptocurrencies all soar to the moon, there’s still a reason to invest in precious metals. While digital tokens are the future, they’re also incredibly dependent on technology and its administration. Without a viable network, Bitcoin and its blockchain peers could quickly unravel.
Precious metals, in sharp contrast, are not dependent on anything. Irrespective of what happens to gold prices or silver prices, bullion is bullion. So long as you own it outright, you have full control and custody of tangible assets.
However, several Wall Street insiders could be keying in on this idea — perhaps that’s why the precious metals are building a support baseline as volume rises. If this is the case, don’t expect gold or silver prices to remain where they are indefinitely.