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Gold went up again yesterday to close at right below $5,500.

It was just a week ago it was at $5,000 and a year ago it was below $2780.

Yes, it feels like it is moving up like silver now and buying now would feel like chasing the price higher. Some are selling, because they have such massive gains in the metals, but the selling has stopped the price from going up more.

The move in precious metals is spreading into other commodities now, as the commodities CRB index has broken out.

This is the historic pattern simply repeating - and anyone who looks at the history of the commodities cycle could see it.

Earlier this year I wrote about buying the PDBC commodities ETF, which owns a basket of various commodities futures contracts and closely mimics the price action in the CRB Index.

It’s jumping too now.

I bought a small position in this earlier this year.

What do you do in markets like this?

How can anyone buy something like silver now?

Well many people are buying it - as I mentioned the other day the silver SLV was the number one traded ETF or stock on Fidelity on Monday. Yesterday it was number six and gold was number 10.

I was a little worried this could be a sign of a coming short-term top, because neither SLV or GLD had been on this list since October.

But I did not sell any of the gold, silver, or mining stocks I own and am not planning to do so anytime soon.

I guess we can thank all of the crypto gurus for training the masses to want to buy AFTER big headline numbers are broken. I’m sure some of them are turning into silver bulls now and predicting silver at $500 or $1000 or some such made up target number.

I know it is very difficult for people to hold on to a giant position in a bull market and they get tempted into trading by jumping in and out.

That’s hard to do and you can beat the rapid traders by simply putting a little bit of money into something and holding - as a portfolio allocation.

Anyone can put 10% of their money in precious metals and just decide to keep 10% in as a safety portion of their portfolio and then just rebalance periodically. That way the price you get in at doesn’t really matter.

So, if the position somehow fell 10% you would just buy more to bring it back up to 10%.

And if you want to you do it when it gets to 11% or 15% or some other such target, but still keep the 10%.

That’s the simplest way to manage a position that is virtually a guaranteed long-term trading system.

People, though, get tempted into wanting to have a massive position to get rich quick, but again it’s so easy to get shaken out when you have big positions.

I write this from experience.

In the 2000’s I traded an almost 100% position in mining stocks at times for years (I was much more of a short-term trader back then, having started out as an internet stock trader in 1998), and while I made money that decade doing this I actually discovered that I would have made just as much if I had just put 20% of my money in the stocks when I first bought and simply held them.

At some point this year I plan on putting together a video course on trading and managing money like this.

With silver and gold up this much now too this is the only possible reliable method I can see to buying it, because no one can predict the exact short-term moves with enough accuracy to guarantee that you won’t miss out on a good entry point or shaken out.

The real question Americans need to ask is do they want precious metals in a portfolio for diversification, safety, and long-term gains?

For most of their lives they just put 40-50% of their money into bond funds for diversification and safety and found that when the stock market went down, or there was a recession, their bond funds would go up.

Then came 2022 which proved that was no longer a consistent safe strategy.

And that year central banks around the world began to accumulate gold for their reserves, making smaller US bond purchases to do it.

Now, even though it is four years later, maybe just maybe some Americans are starting to make a change.

It is more than just for trading.

There is a reason long-term rates have failed to go down when the Federal Reserve lowered interest rates over the past year and a half.

It’s wake up call about bonds.

-Mike

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