In early July, Japan set a premium price for solar energy that was three times the rate of conventional power. This meant utility companies would be paid three times more for electricity sourced from solar.
When it comes to buying gold, central banks have such a poor timing record that they're frequently joked about as a contrary indicator. Recently, they have been buying, quite literally, tonnes of it.
It’s probably the #1 question on every gold investor’s mind right now: Why are gold stocks underperforming gold? Aren’t they supposed to bring us leverage to the gold price?
It feels a little callous writing about Japan with respect to precious metals after the country suffered such a terrible tragedy. However, I think it’s worth discussing because there’s a lesson in it for all of us. In fact, I think the moral could be couched in terms of a warning.
You already know the basic reasons for owning gold – currency protection, inflation hedge, store of value, calamity insurance – many of which are becoming clichés even in mainstream articles.
One of my best friends recently discovered, to his shock and dismay, that five one-ounce gold coins had been stolen from his home. I feel especially bad because I had encouraged him to buy some physical metal, giving him some tips and pointing him to the better dealers.
It’s hard to believe that less than three years ago, silver was $8.80 an ounce. Since then it has nearly quadrupled in value (up 385%) and more than doubled in the last 12 months alone.
There have been numerous reports of bullion shortages in many parts around the world, along with rising premiums. And the two explanations – we’re running out of gold! and, it’s just a manufacturing bottleneck – are at odds with one another. So, who’s right?
One of the cheapest ways to buy and store physical gold and silver is with unallocated (or pool) storage. With unallocated storage, a dealer holds metal that is owned by its customers, but without identifying any particular piece of metal belonging to any particular customer.
