Today we saw a lot of up-and-down movement in the gold market, while silver made a relatively steady (but slow) gain up to it's highest ever post-1980 close. While gold eventually closed higher on the day, capping a 4-day losing streak, silver demonstrated with force that it is now an independent commodity, capable of moving regardless of what gold happens to be doing. This year, silver has gained 21.3%, while gold -- other than a spectacular record close of $1,437.60 on March 23rd -- has essentially drifted along, gaining only 0.2% as of this writing.
Look for continuing signs of strength in silver to indicate the next leg of a very strong upwards movement, which will soon see silver surpass $40, as long as it can avoid falling below $36 within the next week or so. Even still, $50/oz silver before July seems an inevitability, so if you're at all thinking about going in, now is the time. Even at today's price of $37.48/oz, silver is still a bargain, since it's so terribly undervalued relative to gold. The smart buyer will let the price of gold determine if the price of silver makes it an attractive investment, not just the fact that it's outperformed everything over the past few years. When silver and gold -- currently trading at 39:1 -- are trading around a 25:1 ratio, then the price of silver will be "fair." Even still, with gold also tremendously undervalued relative to the obscene amount of fiat currency in circulation, we can reasonably conclude that the precious metals bull market of the past 10+ years has no foreseeable end. To be sure though, when it finally does end, we will see gold and silver at prices previously unimaginable. Mark my words...
Now, the numbers:
Results upon NY close of trading -- March 30, 2011:
- Gold closed at $1,423.80 per oz, up $9.30 and 0.36% from yesterday. Silver closed at $37.48 per oz, up $0.35 and 0.94% from yesterday.
- VFINX closed at $122.34 per share, up $0.82 and 0.67% from yesterday.
Investment #1, Precious Metals:
- Percent return for the day: 0.66%
- Profit for the day: $633.23
- Total percent return: -2.9%
- Total profit: $-2,885,72
Investment #2, Vanguard 500 Index:
- Percent return for the day: 0.67%
- Profit for the day: $683.88
- Total percent return: 2.1%
- Total profit: $2076.66
Advantage: Vanguard 500 Index, by $4,995.50
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