As of Wednesday afternoon, gold had dropped to just above $900 an ounce.  That’s a drop on over 1.5% in one day.  Silver and other precious metals have also gotten swamped over the past week.  All of this comes on the heels of the US Dollar posting some serious gains.  Many investors are worried that commodities may drop even lower in stocks continue to lose steam.  The numbers and figures can be quite scary if you don’t know what you’re looking at.  But to the trained eye, the current state of affairs in the commodities markets is an excellent investment opportunity. 

For those people who have been waiting six months to buy commodities like precious metals, which was the last time silver was under $13 and ounce and gold was below $900 an ounce consistently, it’s a great time to re-evaluate their positions and begin to buy.  For others, who bought in just a few short weeks ago, the recent sink in the commodities markets has them feeling a little ill. 

Many precious metals investors and experts believe that a coming inflation bubble is looming on the horizon.  If the markets are still winding down in the coming weeks, it could mean that gold could hit $850 an ounce and silver could fall to $10-$11 an ounce.  The comeback, if there is one in the pre-inflation build-up to the beginning of next year, could send precious metals into hyper drive.  We could see silver above $20 an ounce and gold well above $1000 an ounce.

I’ve seen fellow precious metals investors buying thousands of ounces of silver as well as dozens of ounces of gold.  They justify these purchases by stating that their position is long on precious metals.  They truly believe that gold will be well above $1000 an ounce before this time next year.  I say that anyone with this view should get their hands on some precious metals in the next week or so, otherwise they may be missing out on this summer’s biggest and most prominent dip.  If this is true, that means oil could spike as well, which is counter-intuitive since oil usually spikes in the summer and not the winter

The precious metals train is predicted to leave the station whenever one of these two scenarios pans out.  Either the economy improves and industrial demand for gold, silver, and other commodities will slowly build and prices will head skyward; or the economy continues to drag its feet or gets even worse, and more and more people begin to see that precious metals are a great hedge against the coming inflation as well as a great way to store their wealth.

I believe that anyone who wants to have a truly diverse investment portfolio needs to buy into some precious metals very soon, before their values skyrocket.  Besides these facts, precious metals are an excellent hedge against an ailing stock market, which is beginning to appear as investors and consumers are quickly losing faith in any sort of real economic stimulus and recovery.