It's been a volatile year for those investing in gold and silver.
Gold is down some 20% year to date, and silver has lost more than 30%. The yellow metal tumbled more than 30% in the three quarters to June as fears mounted of an early end to the U.S. Federal Reserve's bond-buying program.
But the stars are aligning for better times ahead.
Following a record 23% drop in Q2, in which gold suffered a two-day carnage (April 15-16) that took prices down some $225 an ounce, gold gained nearly 9% in Q3. The gains ended gold's longest quarterly losing streak since 2001.
Silver prices fared even better in the latest quarter, bouncing 10.5%.
It's also worth noting as a Capitol Hill debt ceiling showdown looms that during the last debt ceiling debacle in 2011, gold soared some 25% over the July-September period, to reach record highs of more than $1,900 an ounce.
Moreover, with all the uncertainty in Washington, ongoing Middle East geopolitical tensions, and continuing Eurozone woes, it just makes sense to own precious metals as a store of value, cash alternative, safe-haven asset, and means of diversification.
With that in mind, Money Morning caught up with Joseph Merrick, owner of Provident Metals. The Texas-based company is one of the largest precious metals dealers in the world, is among the top 10 precious metal dealers in the country, and has an A- rating from The Better Business Bureau.
Even though this year's price slump has deterred some profit hunters from investing in gold and silver, Merrick said it has been a "banner year" for business.
Check out what Merrick had to say on why business has been booming, on investing in gold and silver going forward, and on the next hot commodity investments…
Investing in Gold and Silver: Insight from Provident Metals
Money Morning: Thanks for joining us today, Joe. First, tell us a bit about Provident Metals.
Joseph Merrick: Provident was founded in 2009 and we've grown at an incredible pace that has allowed the precious metal investor an opportunity to make choices based on education and value instead of being forced to go to the "only gig in town."
MM: Who are your customers?
JM: Our customers are prudent people looking to protect their buying power by investing in precious metals. By and large, that cuts a wide swath of Americans due to the changing environment in which our economy currently stands. We're excited to be at the forefront of this building wave of awareness and knowledge.
MM: How has business been year to date?
JM: It's been a banner year. We have grown tremendously in the past year due to our innovations in the physical investment arena [more on those later], as well as our ability to speak to the everyday person. We are inclusive in our associations with folks and bring them what they want to see.
MM: The U.S. Mint is on track to report record sales for the popular American Silver Eagles. Amid frenzied buying earlier this year, the Mint was forced to ration sales. Did you run out of stock?
JM: Like every other dealer in America, we did run out of stock for a bit in April, but we also allowed people to lock their prices in according to the current spot price so they could add to their portfolio at their price goals. It's a valued service that our customers have begged for and an option we'll continue in the future, provided we know that stock will be coming.
MM: What should investors look for when buying Eagles (gold and silver)?
JM: The most important thing investors should do in this type of situation is buy from reputable dealers to ensure they're going to get their metal. While Provident is one of world's largest precious metal dealers, there are other honest dealers out there as well.
MM: Please explain the advantages/disadvantages of buying scrap (junk) metal versus graded coins.