Gold and Silver Prices Down. Is this an opportunity to invest?

As the Greek saga continues, gold and silver prices are sharply down. What does this mean for investors? Does this present an opportunity to invest in gold and silver? To answer these questions and more we hosted a live chat on our Facebook page with Pete LaTona, VP of Sales at APMEX. Pete is responsible for managing the entire sales team.  Below are a few select questions from the chat today.  Head over to our Facebook page to see the full conversation and like us on Facebook to stay informed about upcoming chats.

Q: Do you think gold and silver will continue to slowly drop throughout the day then rebound starting first of the week?

PL: I learned long ago not to try and predict daily fluctuation in prices. Consider what you think gold and silver prices will be 3-5 years from now because you will hold physical gold and silver for at least that long. Based on what you think of future prices, think about whether today’s price is a good price. You cannot time the markets, but if there is news that a deal has been struck with Greece over the weekend we will probably see an increase in prices.

Q: What % of your portfolio is gold and silver?

PL: What is right for me is not necessarily right for anyone else. Jim Cramer says 5% should be gold and you hear everything from 4% – 20%. I say it should not be 0%. Gold is an insurance policy for the rest of your investments. How big of an insurance policy do you feel you need?

Q: What’s are your thoughts on Asia and the Middle East purchasing so much gold over the last two years?

PL: The rest of the world has been buying gold and silver for thousands of years. We are new to this. It is ingrained in their culture that gold is a store of wealth. This will only increase as the Chinese central bank is predicted to try and catch up with the rest of the world’s central banks. According to the World Gold Council, last year China and India bought 48% of the gold purchased.

Q: Do you think the U.S., Japan & Europe will face orderly or disorderly defaults? When? What order?

PL:  I do not know, however, I am concerned. There is a reluctance to accept the facts as to our financial condition and the measures that must take place to fix it. If the U.S, Japan, and Europe were to face defaults gold prices would probably explode, but the world we live in would not be so pleasant. Defaults are a possibility if we continue to do nothing. Doing nothing is a decision and often a poor one.

Q: Are you having any issues maintaining inventories of standard bullion? Is there evidence to indicate shortages?

PL: We are not having issues at this time, but our reach and list of direct suppliers is much larger than most other dealers. There have been occasions in the past couple of years where silver was scarce due to extreme run ups in silver price. It can happen again, but it is not happening now.