Catch the new gold uptrend

As gold and silver quietly resume their historic role as monetary metals, it’s unlikely that the bull market in precious metals has peaked yet, says Paul Amery. Here, he picks two funds to take advantage.

Precious metal prices have been noticeably subdued during the eurozone meltdown. But as the continent's debt crisis moves towards a likely endgame of defaults and devaluations, don't expect that to continue. You won't find much mention of gold and silver in the current pronouncements of central bankers and EU bureaucrats. Yet their post-World War II world of ballooning, unrepayable government borrowing seems to be coming to a messy end. So the quiet reassumption by gold and silver of their historic role as monetary metals continues. It's unlikely that the bull market has peaked yet.

However, the market has taken a lengthy breather. Gold has fallen about 18% from its peak in September 2011. Silver's current $27 an ounce is some way from the near $50 peak recorded last spring. This takes the gold/silver ratio to above 58, which is towards the top end of its recent range. In other words, silver has become cheaper compared to gold, something that's shown by the rise in the red line on the chart above over the last two years.

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Paul Amery

Paul is a multi-award-winning journalist, currently an editor at New Money Review. He has contributed an array of money titles such as MoneyWeek, Financial Times, Financial News, The Times, Investment and Thomson Reuters. Paul is certified in investment management by CFA UK and he can speak more than five languages including English, French, Russian and Ukrainian. On MoneyWeek, Paul writes about funds such as ETFs and the stock market.