Savvy Investors Rebalance, Switch Overvalued Stocks to Precious Metals

Gold and Silver Start 2014 Strong after Major Down Year

Mike Gleason Mike Gleason
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January 3rd, 2014 Comments

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Welcome to Money Metals Exchange's weekly market wrap podcast. Helping precious metals investors during these treacherous times. Now, here's this week's market wrap with commentary and analysis from the fastest growing precious metals dealer in America, Money Metals Exchange.

Mike Gleason:

Happy 2014 and welcome to this week's market wrap podcast, I'm Mike Gleason.

Precious metals kicked off trading in the New Year with a strong rally. On Thursday, gold gained 1.5%, silver surged 3%, and platinum and palladium each put on about 2%.

The metals had faced selling pressure late in 2013 as traders and asset managers looking to realize capital losses for the tax year sold into the market. The good news for the bulls is that they were again able to hold the line at the June lows and prevent a major breakdown from occurring. Now we'll have to see if the potential double bottom pattern plays out and serves as a launch pad for a big rally in the first quarter of 2014.

We're certainly due for a rally! The market action in 2013 was decidedly to the downside in all the precious metals except for palladium. This under-owned and often overlooked platinum group metal proved its value as a portfolio diversifier. Palladium gained 2.5% on the year even as gold, silver, and platinum each suffered double-digit losses.

For gold, its 28% yearly drop was its worst since 1981 – literally a once in a generation event. But it was actually the first down year in 13 years! Sure, it was painful for all of us who own gold to suffer through 2013, but it's behind us now. And it's not likely to be repeated anytime soon.

On the other hand, the second half of 2013 presented a rare opportunity for folks to START investing in gold and silver, and we're pleased to report that 9,000 new people joined the ranks of Money Metals' customers in 2013! Many others took advantage of the opportunity to add to their positions -- or they are doing so right now.

The potential now exists for a massive short covering rally in the beaten down gold and silver markets as lopsidedly bearish bets piled on late last year get unwound. How long it may last and how far it may take prices, we don't know. But we do know that we are coming off extremely oversold and depressed conditions in the market and that they are usually precursors for significant upside moves.

In overseas trading on Friday morning, metals prices added slightly to their gains from Thursday's action in the U.S. As of this Friday morning recording gold now trades at $1,231 an ounce, up about 1.5 % on the week, while silver is selling for $20.12, basically flat versus last week's close but up significantly from a price as low as $19.00 an ounce that we saw on New Year's Eve before a big reversal.

Silver typically moves in bigger incremental steps than gold, both on the downside and the upside. If we did truly see a major precious metals bottom in 2013, then silver is the precious metal to favor in 2014 – at least if you are attracted to its superior upside potential. If you prefer a smoother ride, then you may wish to favor gold.

Now is an especially good time to rebalance your investments, selling stocks that are at record highs and deploying that capital into the undervalued physical precious metals.

And don't forget, you can do all of this inside of an IRA if you wish.

As you consider IRA contributions for 2014 and how to allocate them, we hope you'll consider opening up a physical precious metals IRA. Rather than bank your retirement on derivative gold or silver tracking instruments that Wall Street sells, you can have the security of holding actual bullion coins, bars, and rounds inside an IRA. With a physical precious metals IRA, you even have the ability to take delivery of your bullion at retirement rather than liquidate it!

Money Metals Exchange is an approved dealer at the most reputable trustee companies that can set up your precious metals Self Directed IRA, help you rollover funds from other retirement accounts, and put your money to work with your choice of our many types of bullion products that meet IRA requirements.

For more information please download our handy IRA brochure available on our website. Or you can talk to one of our specialists who will be happy to help guide you through the process. Just call us at 1-800-800-1865 during our normal business hours.

In the meantime, please take a listen to an overview presentation of how precious metals IRAs work, courtesy of our friends at New Direction IRA. Here it is.


Have you been thinking about a gold or a silver IRA? If you'd like your retirement funds to enjoy the benefits of investing in real precious metals like gold, silver, platinum, and palladium, you can, and it's a relatively easy process.

There are four parties involved when using your IRA to purchase real precious metals, the IRS, your self-directed IRA provider, a precious metals dealer, and a precious metals depository. In return for the special tax status that retirement accounts receive, the IRS sets some parameters that need to be followed. Let's look at some basic information to help you line everything up.

First, your IRA is allowed to purchase metals as a commodity, but cannot purchase rare or collectible coins. Therefore, graded coins cannot be purchased. However, the IRS does specifically allow US-minted American Eagles that have not undergone grading.

Second, there is a requirement for the finest purity of the metal, .995 for gold, .999 for silver, .9995 for platinum and palladium. Note that these requirements do not apply to the American Eagle coins that we just mentioned.

Third, your IRA cannot buy or sell your metals from a disqualified person. Disqualified persons include you, your spouse, your ascendants, descendants, and their spouses. A self-directed IRA provider does allow assets like precious metals and will help make you aware of IRS requirements, as well as perform recordkeeping for your account. If your retirement funds are not currently with an IRA provider that allows self-directed investing, you may be able to move your funds without a tax penalty to a provider that does allow precious metals.

It is a good idea to set up your self-directed IRA and fund it before trying to negotiate your purchase with a metals dealer. The prices of metals are very volatile, and brokers are not likely to lock in a price for a long period of time. Self-direction of your retirement account means that you get to select the precious metals broker with whom you're comfortable. Due diligence is your responsibility, but once you're satisfied with your selection, you make the deal and direct the IRA provider to fund your purchase.

The IRS restricts you from keeping your IRA-owned metals in your physical possession. They must be held in a depository for safekeeping, but the selection of the storage site is up to you. Factors that you might consider include fees, segregated storage, facility location and type, or insurance levels.

Now, that we've identified the four players involved and talked about their roles, you can start putting together your new precious metals IRA. We hope this introduction to putting precious metals in your IRA portfolio will help you navigate the process successfully. Thank you for listening.

Mike Gleason:

And finally, as a reminder, IRA contribution limits for 2014 are $5,500 per individual. But if you are 50 years old or better, you can make an extra catch-up contribution of up to $1,000, for a total IRA contribution of $6,500.

If you are interested in opening up a precious metals IRA, we urge you to get the ball rolling right away so that you can obtain a large quantity of ounces of gold, silver, platinum, or palladium while per-ounce prices remain at these relatively low levels.

Well that will do it for this week's market wrap podcast, thanks for listening. This has been Mike Gleason with Money Metals Exchange reminding you that we remain fully committed to getting you the most value for your depreciating dollar….with speed, with accuracy and with top notch service. Have a great weekend everybody.


Thank you for joining us for this edition of the Money Metals Exchange Weekly Market Wrap. Be sure to come back next week, and don't forget to subscribe to our weekly podcast through iTunes. For answers to all of your questions, or to discretely and securely buy or sell gold or silver coins, bars, and rounds, call 1-800-800-1865. Our knowledgeable and no-pressure specialists are standing by between 7:00 a.m. and 5:30 p.m. mountain time, Monday through Friday. Visit us at or call 1-800-800-1865.

Mike Gleason

About the Author:

Mike Gleason is a Director with Money Metals Exchange, a precious metals dealer recently named "Best in the USA" by an independent global ratings group. Gleason is a hard money advocate and a strong proponent of personal liberty, limited government and the Austrian School of Economics. A graduate of the University of Florida, Gleason has extensive experience in management, sales and logistics as well as precious metals investing. He also puts his longtime broadcasting background to good use, hosting a weekly precious metals podcast since 2011, a program listened to by tens of thousands each week.