The precious metals sector is so beaten down, it is an excellent investment opportunity in and of itself, as well as providing an investment portfolio hedge in the increasingly likely event of a major financial and economic crisis in the foreseeable future.
For example the current gold price is only approximately 58% above its peak 1980 price level, whilst silver is approximately 66% below its peak 1980 price level.
The current silver price makes silver the most undervalued financial asset in the world, notwithstanding that it has had 17 consecutive years of supply deficit totalling some 1.8 Billion ounces!
Whilst the mining shares included within the Philadelphia Gold and Silver (XUA) precious metals mining shares index are at the time of writing 16% below the index's value of 100 at the time of the index launch in 1984!
Precious metals price suppression has been endemic for so long, that many investors think that that the Central and Bullion banks are capable of suppressing those prices ad infinitum. But there are clear signs that they appear to be losing control, so much so, that eastern nations, sovereign wealth funds and even some Central banks are now buying any dips in the gold price.
The seemingly orchestrated waterfall declines in gold and silver, that occur on a regular basis in the precious metals sector in recent years, for no apparent reason, are becoming progressively shallower and shorter lived. The reason for that is, the supply of physical precious metal bullion is increasingly strained, a situation exacerbated by noteworthy declines in global gold and silver production. These declines in global production of precious metals are expected to increase with the passage of time.
The writing is on the wall for much higher prices in the precious metals sector.
Both China and Russia have repeatedly stated that they wish to see gold re-introduced into the international financial system in a key role.
History has shown that when there is a major loss of lose confidence in the general financial markets, that has traditionally resulted in a marked increase for precious metals and the related mining shares with substantial price increases not being uncommon.
When investors lose faith in the general financial markets the small precious metals sector will experience a tsunami of demand that will take most financial analysts completely by surprise, and will very likely be well beyond that imagined even by ardent advocates of gold and silver.