Monday Thoughts – Panic Buying in Gold?


Checked the markets this AM to find serious action in the precious metals market (click here for free quotes from

Gold was up but check out the action in the “silvery” metals: silver, platinum, palladium – up 3-5% today. I think today is a panic day (if I had to title it!). People know about the problems:

1. “Helicopter Ben” Bernanke’s magic money printing.

2. Daddy O’s continuation and “improvement” of his predecessor George “if Wall Street is losing money capitalism is broken” Bush’s bailout nation spending on everything.

3. More bills coming down the pipeline that will be bailed out – California, state and city pensions, Medicare/SS, FDIC, PBGC, etc.

But even though people know this, most folks have not been ACTUALLY buying gold/silver etc – they are still either talking about it, thinking about, or don’t know anything about it. I think today is a sneak preview of what happens when many people try to buy into an asset that is actually very small (available gold – supplies not locked up in central banks that is – is very, very small compared to supply of printed money).

We are due for a respite in metal prices but, taking a lesson from the stock market that should not be this high as many exhort, this could keep going. I do think though, that the lesson today, whether we get a correction soon or not, is that if people really drove into buying gold et al, prices in precious metals would likely get very freaky.

Chris Grande

For an at home exercise, think about this – prices of metals are up 3-5% today. Ask as many of your friends as possible if they bought today or even if they own metals. If the answer is no, you get a good idea of potential demand – oh and if your friends are clamoring to buy, let me know because as Peter Lynch discussed in his book One Up on Wall Street, it may be time to sell!

Note: I don’t give advice on this site therefore this article is not meant to be taken as advice. Read disclosures. My goal is to educate and make you think but you’re a big boy/girl – you have to make your own choices – I will not tell anyone what to do on this site. Thank you!