Wall Street Silver: Buy Gold & Silver When Everyone Hates It
Historically, precious metals have fared well during times of high inflation. Despite a bump higher in prices during 2020, the precious metals have given up much of their gains in the past two years.
The space looks ugly, and unloved, even as inflation remains high. That makes it an asset worth considering from a contrarian perspective. That’s because ideas that are out of favor with the market trade at a much better value than those in favor with the market.
That’s similar to the trend that’s occurred in uranium in the past few years. Two years ago, uranium was hated and out of favor with the market. Now, it’s a popular trade as investors have clamored for any energy-related investment.
A combination of rising interest rates and a slowing economy are sending investors away from precious metals and small-cap projects in particular. That’s allowing astute players to get their best deals in years in the resource space.
We may be entering a narrow window where small-cap projects can deliver fantastic returns in a short period of time. The best returns could come from those in the precious metals space, given their prices and valuations today.
With investors looking for hedges now, precious metals do stand the test of time. While they may not seem to work well in the short-term, the value relative to price right now looks attractive.