It is basically insurance against dollar collapse and an inflation hedge.
Gold moves counter to the USD just like Crude Oil. Right now, the whole world is piling into dollars and so gold is more expensive in other currencies, but cheaper in USD.
For hard values, look at ratios of one thing to another, rather than the USD price.
I don't purchase metals as a commodity speculator and I don't purchase metals using credit. If I were a metals trader, I'd only look at ratios.
The following is not to be construed as investment advice, since I am not a financial planner:
That said, how many ounces of silver can an ounce of gold buy? Right now, its around 65. If you bought silver right now using gold and the ratio narrowed to 40, then you could trade back to gold from your silver and end up with a gain in the quantity of your gold.
If I were just starting out, I'd allocate USD at a time like now when USD is strong and purchase a pool of both metals and then start trading them against each other. Doesn't matter their USD price at that point, you keep increasing the size of your pile.
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