NEW YORK ( TheStreet) -- After the quick rise in gold and silver prices, is it time to buy, or wait for a pullback? TheStreet's Joe Deaux asked Rick Rule, chairman of Sprott USA.
Rule said silver in particular has had a rather strong week. While he still finds the fundamentals favorable, he attributed most of the move to the metal's deeply oversold condition.
Silver, which often outperforms gold to both the upside and the downside, is up 17% for the month of August.
Rule added that it is seems as if we've had a large rotation in the two metals, where weak hands in the paper and futures market were shaken out of their positions and long-term, non-margin buyers were taking in physical gold.Physical demand remains elevated, as seen by India's inability to stem demand despite raising taxes on purchases of the precious metals, Rule said. The metals are being bought outside of regulator control and consumers have also shown they are willing to pay the heightened taxes. Although traders might find precious metal prices too high to chase, long-term investors still have favorable entry points, he said. Rule concluded that he remained a buyer and that gold is solid portfolio insurance. Platinum and palladium also have the most favorable supply and demand fundamentals of the entire group. -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell