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With silver prices down some 30% year-to-date, is now a good time to buy silver?
We at Money Morning love the buying opportunity being presented in the silver market. With a near zero interest policy in the U.S. likely to stay in place for at least a few more years, and global monetary printing presses continuing to run at full speed, precious metals like silver are once again a lucrative, and now much cheaper, asset.
Rick Rule agrees.
Money Morning recently spoke to Rick Rule, president of Sprott Asset Management and founder of Global Resource Investment Ltd., about silver's decline in 2013 and what investors should do now.
Here's what he said about if now is a good time to buy silver...
Rick Rule on Buying Silver Now
To get a better understanding of silver's recent rout, Rule said it's important to take a look back at the white metal's 1970's bull market when it went from $1.50 an ounce to $50 an ounce.
"During that eleven-year run between 1970 and 1981, there were probably 10 or 12 declines of greater than 10%; three declines of greater than 20%; and one decline in 1975 that was greater than 50%," Rule noted.
Rule acknowledged that silver's recent rout is "inconvenient" for silver investors - but also part of the metal's volatile cycle.
"It is natural, normal and healthy in the context of a bull market," said Rule. "Things don't go straight up, because self-fulfilling prophecies seldom in fact are."
Citing the 100% jump in silver prices over 2009-2011 timeframe, Rule said that kind of unprecedented move, from a technical standpoint, almost necessitated some kind of pullback.
So with silver prices depressed, Rule said it's a great time to buy.
"That doesn't suggest it [silver] can't fall further," he added. "In 1975-1976, the silver price fell by 50%. I'm not suggesting that can't happen again. I'm just suggesting that every circumstance that occurred in 2010 that was bullish for silver - every single one exists today. What's changed is paradigm and price. If you did believe the thesis in 2013, certainly the fact that the metal is cheaper is better for investors."
How to Invest in Silver
So if you want to buy silver, Rule said the method to use depends on the individual investor.