TrimTabs is out with its newest round of investment research and it is calling for investors to buy gold and silver for the long-term on what it calls a dollar cost average basis. While the move may be different today after the employment data, this is going to be music to the ears of investors who are in SPDR Gold Trust (NYSE: GLD) and iShares Silver Trust (NYSE: SLV) for a multi-year outlook.
Charles Biderman noted, “The U.S., Europe, and Japan are printing enormous sums to pay their bills and in turn are devaluing their paper currencies. I doubt that’s going to change because it’s much easier for central bankers to print money than it is for politicians to cut spending.”
Biderman went on to note that gold and silver prices are going to skyrocket from retail money chasing a limited supply of the metals. On silver he noted, ““The gains in silver could be particularly strong because the silver market is much smaller than the gold market. Silver ETFs have only one-ninth the assets of gold ETFs.”
The current unemployment data from today is signaling that the Fed Funds rate hikes could come toward the end of 2013 now rather than the end of 2014, but that is one-month data.
TrimTabs goes on to note that monetary easing by the Federal Reserve and the European Central Bank has helped push up gold and silver prices much more than stock prices. He even noted that since QE2 was announced, the gold ETF is up 41% versus the 30% gains for the SPDR S&P 500 (NYSE: SPY) gain of 30% after including dividends.
The report even noted that in the past three weeks alone there has been a $1.4 billion inflow into gold ETFs by investors while silver ETFs saw smaller inflows.
JON C. OGG