Does it make sense to bet on (short term) higher gold and silver prices if the government announces it is going to expand the money supply?
There are two reasons it doesn't have to work in the way described above: the expectations of market participants, and investors' emotionality.
As far as expectations are concerned - what happens if the Fed decides to print $500bn? Will gold soar immediately? Not necessarily - it depends on what people were expecting to hear. If everyone believed that the Fed will print $100bn, then yes, this will be a positive shock to the market which will cause price to rally immediately. However, if people expected Fed to print $800bn or so, they will be surprised to see that the Fed had printed "only" $500bn, and some investors will sell their gold as it will have smaller appeal to them given lower-than-expected amount of money that had been printed.
If people had already "factored in" the huge amounts of money being printed, then once it is officially confirmed it doesn't necessarily have a positive effect on price in the short term.
Here's an example for how market emotionality can play out. If people didn't really believe that gold is worth over $1,200 but bought it at that price anyway just because they were afraid (!) that the market is going to irrationally get away from them, they will be happy to sell their holdings once the sharp rally takes a pause.
In short – the excessive expansion of the money supply is a positive fundamental factor for gold. However, we've had a positive fundamental situation in the precious metals for years now and corrections have taken place nonetheless.
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