Look at the runups in the late 70s and early 80s. We were less than ten years off the gold standard, had just experienced a tough oil embargo, and had serious inflation problems.
Today we have quantitative easing like we haven't seen since 1934. Oil is moving as freely today as it ever has. And, technically, inflation is at historic lows.
Arguements against:
- Now some may argue that the historically low interest rates are fueling the rise in PM through speculative purchases. There may be something to this.
- Most people will point to the rise and fall during the 70s/80s, but just read above to see why it isn't analogous.
- Other's will invoke the housing bubble, but this analogy falls short in that houses are bolted to the ground where they're built, whereas PMs are a portable, global commodity.
- And still others will continually point out that you can't eat gold. I try to counter with the fact that you can't eat bullets, either, but the broader implications of that brief statement are usually lost on people.
Where am I?
- Due to the recent rise in value, PMs are starting to become over-represented in my portfolio. This is especially true for silver.
- Still, even then, my philosophy is buy and hold.
- In the unlikely event that the gold/silver ratio drops below 16:1, I will reluctantly sell off some silver for gold to rebalance my PM holdings back to 50/50 Au/Ag.
The future
- I don't know what the future holds.
- I see enough global growth and dollar devaluation to support $30 silver and $1200 gold.
- If silver begins a precipitous decline, there's the ZSL option.
[buy physical on the way up, and leveraged shorts on the way down!]
[...wheeeee! yeaaaah! yeeehaw! oh nooo! rumble rumble rumble! baaarf! ...that's the leveraged ETF roller coaster!]
- I never saw silver above $30, so I bailed out of the AGQ nailbiter, and missed out on 3x gains.
I realize I didn't really answer the OP's question....and I'm not going to.
Suffice to say that I'm pulling some cash to go look for an early production Arisaka Type 99 this morning. If I don't find one, that cash will probably get tossed in the PM bucket.