Is gold/silver a good investment right now?

Interesting question!

From my point of view, the best way to invest now is commodities. That’s why I consider that gold&silver investment is good right now. Last summer, the commodities sector was frozen in a half-decade long bear market with few signs of a thaw in the near future. Now, it's hot once again, with gold and silver funds set to see record-breaking inflows of cash.

Precious metals, and gold in particular, have been the most favored commodity sector, according to a recent report from Barclays, which estimated flows into and out of commodity funds worldwide. So far, 2016 is shaping up to be the best year ever for inflows to this type of product. You can read that correctly: best year ever. Meanwhile, the sector as a whole showed the strongest January to July performance since 2009, a period at the height of the financial crisis, according to the report. In the year through July, investors worldwide poured a total of $51 billion into commodity-focused ETFs and similar investment products.

The move into the sector comes after back-to-back annual declines in commodity prices as the Chinese economy slowed and the U.S. dollar rallied. In addition to slowing Chinese growth curbing demand for commodities, the sector was hurt by speculation that the U.S. would begin normalizing interest rates as its economy improved, making fixed-income securities more attractive. Quantitative easing and negative interest rates have been game changers-distorting the valuation of government bonds, breaking the theoretical ceilings in prices, squeezing shorts and underweight positions and feeding what, in my view, is one of the largest financial bubbles in history.

Well, the price of gold was at $1,054 on December 17, 2015, the day after the Federal Open Market Committee last raised its discount rate. Although Fed officials began to provide "forward guidance" for possible interest rate increases in 2016, the market took the price of gold upwards. Its 2016 high came on July 6 when the price closed at $1,374. Currently, the price has dropped off a bit, closing at $1,338 on Monday, but this still represents a 27% increase from the date after the December FOMC meeting.

Note that this move seems to have been broad enough to spread into other commodities. The Thomson Reuters/Core Commodity CRB Index, hit a near-term low on February 11, 2016 and has risen 18% since that date. Another commodities index, the S&P GSCI GFI Futures Index has risen by 27% since the February 11 date.

In another area, the yield on the 10-year Treasury note was 2.29% at the close of business on December 16, 2015. On July 8, 2016 this yield was 1.36%, and now is at 1.59% allowing analysts to talk about the asset bubble in bond prices.

And, then there is the stock market. Although the S&P 500 stock index closed at 2,073 on December 16, 2015, it closed at a near-term low on February 11, 2016 of 1,829. Note that this was the date of the near-term low for the commodity market indexes.

On Friday, the S&P 500 closed at a new historical high of 2,183, a level that is more than 19% above the February 11 level.