In breaking news over the weekend, the London Metal Exchange (LME) has announced a plan to exit the gold and silver futures trading business, further reducing the number of entities seeking to influence metals prices via paper manipulation. This continues a theme we have been discussing for physical price discovery being determined on a physical exchange basis, which is long-term positive for precious metals owners.

Those concerned about the recent downturn that started Friday are reminded that the current downturn encompasses all asset classes. It is usual for gold and silver to get caught in the downdraft initially. But in routs, like we are currently seeing, historically, gold and silver launch into a massive long-term growth over the ensuing 2-5 years. This time should be no different.

Gold outperforms stocks, bonds, and real estate YTD, which verifies our previous cautions that it is less risky than other asset classes (even in a downturn event). Stocks, bonds, and real estate had reached such heights that any downturn would be painful, whereas gold and silver still have much room to grow on an inflation-adjusted basis.