The last time I wrote about precious metals in August, gold had broken through the $1500/ounce level for the first time since 2013, and silver had just eclipsed $17/ounce. Hedges against uncertainty, both metals were on the rise primarily due to the trade/tariff issues with China.
Gold then broke through $1550 in early September, but gave back about $100/ounce by November as fear subsided, and U.S. stock markets headed higher. Meanwhile, silver topped out at $19.50/ounce in early September, a three-year high, but fell to the mid-$16 level by early December. Again, lower the uncertainty felt in the markets and economy, and the metals pull back.
With the introduction of more uncertainty, in this case heightening tensions with Iran, precious metals are again on the upswing. At this writing, gold is trading at $1580/ounce, a near 7-year high, while silver is at $18.51. I expect that both will head higher from here until tensions deescalate, or more specifically until the fear of greater conflict subsides.
One thing to keep in mind about precious metals: they are not an investment, per se (in my opinion, anyway). They are a hedge against the unknown, the uncertain. They are a store of value in a world where currencies are backed by the intangible. They produce nothing, and don't generate earnings or dividends, but will react favorably in certain situations when other assets are taking it on the chin.
The gold/silver ratio (the number of ounces of silver it takes to buy one ounce of gold)is currently just above 85. Originally fixed at 15:1 by the U.S. government in 1792, it averaged 47 during the 20th century, but has been much higher in recent years, topping out at 100 in 1991. While many dismiss the validity of the gold/silver ratio in modern times, if you applied the average of 47 from the 20th century to current prices, silver should be in the $33.50 range (when applying the current gold price to the ration), or gold should be in $870 range (when applying the current silver price). I'd say that if one of the metals was truly undervalued at this point it would be silver.
The longer-term view for precious metals, in my opinion, is as it applies to a spiraling national debt, which it seems neither political party seems to care about anymore. If the trend continues, and it reaches the tipping point (assuming we are not there already) there are two ways out, inflate or default. I'd bet on the former, and precious metals should still serve as a great hedge in that situation.