Monday, November 30, 2015

Precious Metals Update 2015

A couple things to talk about today:
  • Gold's Correction Analogues
  • Price of Gold in SGD
  • Brand and Size Stacking Preference for the Future
  • New Competitor: DK Bullion


Tiho from ASSOL has updated his gold analogue chart showing the previous bear markets in gold.

As you can see, the general trend before this current bear market used to be that the longer the bear market goes on, the shallower the drawdown from it's peak.

However, this current bear market has shown us that history is not exempt to exceptions and this bear market is currently the officially 2nd longest bear market in history, going longer than the 1996-1999 bear market and also going deeper as well.

Will this trend continue? Personally, I doubt it given the massive massive negative sentiment on gold for the past few years. It seems like most of the weak hands have been shaken out.


If you look at gold right now in SGD term, we're just around the support of $1480-1500. Is this a buying opportunity? Only the future knows!

The end of the year is coming and I am eagerly waiting for the 2016 mintage of precious metals that should be coming into stock soon. Good news is that the crazy premiums that I talked about a while ago have since died down and we're are heading back to normal. The Canadian Maple which usually trades at a premium of 17% to spot in a tube is now selling at 21%, but it used to be selling at a huge 27% premium over spot.

My favourite silver bar to stack, the RCM 10 oz are back in stock, but they seem to be a really popular retail product, so their premiums are very elevated for a 10 oz bar.

As it is right now, I buy 1 tube of Silver Maples and Eagles and a single Canadian Maple every year. For opportunistic purchases, I would probably start with the Perth Mint 100g for gold and the Nadir 1kg bar. The RCM 10 oz no longer seems viable now that its premium has gone up.

As usual, I will be buying my stash through BullionStar, but I have to highlight that I have recently found another dealer called DK Bullion. While BullionStar seems to have pretty good pricing for gold product in small quantities, DK Bullion has a better bulk rate. However, when it comes to Silver, DK Bullion seems to have a very good rate for tube coins and also silver kilobars. They do also have a very interesting promotion, which is free local delivery for kilobars and above. Of course, I must admit that BullionStar is a great precious metals dealer, especially if you look at it's full-featured and well maintained website and shopping portal. DK Bullion looks like it could use a lot more improvements to its website, as well as FAQ and information section.

To be honest though, a $20 difference (or about 3%) for a Nadir kilobar seems like a lot to me, so I think maybe later in December or early next year I might give DK Bullion a try. I still invest in precious metals through BullionStar and their VaultGram product though, so it's not like I'll be running away from BullionStar anytime soon.

2 comments:

  1. GMGH what are your thoughts about this chart?

    Gold prices for the past 100 years, adjusted for inflation
    http://www.macrotrends.net/1333/historical-gold-prices-100-year-chart

    I know nothing about gold, but it looks like gold prices are in the process of reverting to the mean... What do you think?

    ReplyDelete
    Replies
    1. Hi J,

      Sorry for the late reply, I missed this comment.

      I would say that not all data sets are mean reverting. I doubt we would go back to $300, but who knows! Haha.

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