Currencies are gradually losing their value as respective governments are authorizing treasuries to issue bonds to central banks which reimburse treasuries with payments drawn on zero-balance accounts. This step is only the first in a series leading to fractional reserve fiat currency banking.
Subsequent steps act to further magnify the supply of fiat currency which ultimately fuel the rise in inflation concomitant with interest rate hikes. These huge additions to the supply of fiat currency through excessive printing and fractional reserve banking grossly undermine the value of fiat currency until it approaches nearly zero. A mechanism for triggering the preservation of value is found in the investment of precious metals, in this case namely gold and silver bullion bars and coins.
While the value of fiat currency is continually debased by such governments seeking to float their national debt away through inflation, governments are also fearful of the role of precious metals in the hands of private investors who might thereby hinder the usurping of value by the governments from such investors' liquid assets. Governments would thus benefit by enjoying the receipt of this wealth transfer from the investing populace in order to both pay off national debts and realize windfalls.
Hence there exist periodic incursions into the precious metals "paper" markets, made up of gold and silver futures contracts, by commercial banks and bullion banks at the behest of central banks acting on behalf of governments. Such forays result in huge selling expeditions activating a large number of stops in the markets and culminating in major drops in the prices of precious metals.
Curiously, the physical quantities of precious metals allegedly redeemable upon expiration of such futures contracts far surpass the availability of such physical precious metals, giving rise to the serious possibility of a panic as these vast discrepancies come to light. Indeed, the ensuing panic to buy physical precious metals seems to have already begun at this writing.
It is therefore important to realize how these sharp, periodic drops in precious metals prices surface and to hold one's ground without selling one's physical precious metals in a panic. One must remember that such precious metals, ideally held in private storage outside the banking system, represent an investment and should not be involved in any form of short or medium term trading. The strategy is for the loss in value of one's liquid assets to be assumed by the gain in value of one's precious metals by way of a hedging mechanism.
Additionally, should one be interested in realizing a profit beyond the hedging requirement, one would need to possess precious metals in excess of that needed to hedge, so that effectively one would be able to invest in the next undervalued asset class after taking one's profits. Possibilities are therefore twofold, hedging and profits, the long terms costs of which are monthly storage fees to a reliable vault storage facility arranged by a reputable bullion dealer.
These financially turbulent times are indeed precarious, with almost daily instances of disasters impacting the politico-economic profile of the financial world. To protect oneself from the undesirable and undeserved consequences of such developments is an absolute necessity and should be considered a debt to oneself. Beware of sly government spokespersons suggesting that everything is under control, for this is far from the truth, as history has repeatedly demonstrated.