Cyber Attacks And Owning Gold

On Wednesday July 8th, the NYSE halted trading for several hours citing a “technical glitch” as the culprit with stocks finally resuming trading one by one later in the day. While on the same day United Airlines grounded planes as they resolved “a network connectivity issue”. Cyber-attacks or not these incidents reveal just how vulnerable our systems are and that everything could change in an instant.

The above situations emphasize the need to own some physical precious metals that are accessible before a crisis happens. A large scale “glitch” lasting days or even weeks would dry up physical Gold and Silver supply immediately. Debit and credit cards may be affected, and potential buyers will need cash to purchase any bullion they can find it.

I’ve received several inquiries asking when it is a good time to buy Gold and Silver, I jokingly say “when it’s available." Though I’m kidding, there is some wisdom in buying the physical metal when the supply is healthy and premiums are low. During the Gold and Silver crash of 2008 premiums exploded higher and shipments were delayed weeks or even months.

Though I believe Gold prices and Silver prices will likely head lower before putting in the next Major cycle low, I can’t guarantee investors will be able to take full advantage of those lower prices. I recall premiums on Silver Eagles exceeding $4.00 in 2008 when Silver crashed below $10.00. I imagine 40+% premium would seem cheap if there is a full on panic or crippling cyber-assault. The incredible demand and infinitesimal supply would likely cause premiums to rise to over 300% the paper asking price and quality bullion would be rare to find. I also encourage staying with recognized bullion such as American Eagles and Canadian Maples. They cost a bit more upfront but will be easy to sell and less likely to be counterfeited.

Our goal at Chartseek is to help Gold and Silver investors time their market entries through the use of cycles and technical analysis. We have found that Gold and Silver make a Major cycle bottom every 7-8 years, with the last being in 2008. Though I think Gold will challenge the $1,000 level before bottoming, it may be hard to find physical bullion at reasonable premiums during a panic selling. Selloffs happen fast and while many people are busy or even sleeping. We can dream about getting in at the exact low but reality makes it nearly impossible.

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We offer many affordable services check us out at Chartseek.com,

-Pierce