The momentum crowd has been running up gold and silver based on superficial beliefs about QE3. This group of investors is not known for deep study or paying heed to rigorous analysis. Now a major player in the metals business is sending a signal loud and clear that gold and silver prices are not about to skyrocket.

Freeport-McMoRan Copper and Gold Inc. FCX, +2.74% is spending $9 billion not to buy another metal company, but to diversify into energy.

Proven reserves of Freeport include 33.9 million ounces of gold, 330.3 million ounces of silver, 119.7 billion pounds of copper, 3.42 billion pounds of molybdenum, and 0.86 billion pounds of cobalt. It stands to reason that if Freeport believed that QE will cause gold and silver prices to skyrocket, it would have made acquisitions of gold and silver miners. Instead, Freeport is buying Plains Exploration & Production US:PXP for about $6.9 billion and McMoRan Exploration for about $2.1 billion.

It is worth examining market caps of some precious-metal miners to see what Freeport could have bought in the precious metals space for nine billion dollars. Here are a few examples:

Pan American Silver with a market cap of $2.75 billion.

Coeur d'Alene with a market cap of 1.99 billion.

Hecla Mining with a market cap of $1.60 billion.

Kinross Gold with a market cap of $10.84 billion.

Eldorado Gold with a market cap of $9.52 billion.

In the meantime, the SPDR Gold Trust ETF GLD, -0.24% and the iShares Silver Trust ETF SLV, -2.66% fell below technical supports. Market Vectors ETF Trust Market Vectors Gold Miners EFT GDX, -0.14% and Market Vectors Junior Gold Miners ETF GDXJ, -0.65% also lost ground.

It did not help that Goldman Sachs downgraded its projection for gold prices. Goldman's new target for gold over the next 12 months is $1800. Interestingly, Goldman forecasted gold price of $1750 for 2014.

In my opinion, based on their actions, Freeport, a company with a long history in the metals business, does not believe that gold and silver prices will skyrocket because of QE3, and neither should you.

Every astute investor should understand the true nature of QE3, which isn't the same as the popular belief. History shows many examples of astute investors making a killing when they were able to carefully study a phenomenon and conclude that the popular beliefs were wrong.

The subject is of such utmost importance to investors that we are making available to the readers of this article an online seminar titled 'Gold and Silver Post QE3' at no charge.