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Home Finance Finance Prospects Of Gold And Silver These Days
Prospects Of Gold And Silver These Days PDF Print E-mail
Written by Jack Wogan   
Tuesday, 26 April 2011 08:52
Afraid of the grim evolution of the European debt crisis and of the conflicts in and provoked by Libya, retail investors are eagerly purchasing gold and silver these days, a fact significantly pushing rates up last week, for instance, with gold selling for 1,452 dollars an ounce, gaining thus 19.50 dollars, and silver selling for 39 dollars an ounce (a thirty-year record), gaining thus 69 cents. Under these circumstances, economists think that particularly with the worsening riots in North Africa and the Middle East, which might affect the production and transportation of oil from the area, the prices of both hard assets are to rise even more.
by JackWogan


Afraid of the grim evolution of the European debt crisis and of the conflicts in and provoked by Libya, retail investors are eagerly purchasing gold and silver these days, a fact significantly pushing rates up last week, for instance, with gold selling for 1,452 dollars an ounce, gaining thus 19.50 dollars, and silver selling for 39 dollars an ounce (a thirty-year record), gaining thus 69 cents. Under these circumstances, economists think that particularly with the worsening riots in North Africa and the Middle East, which might affect the production and transportation of oil from the area, the prices of both hard assets are to rise even more.

Regarding gold, as evidenced already by the financial crisis, its rates are changing subject to the developments of fiat currency, gold behaving thus more like a currency than a commodity. Or, the enormous federal debt of the US and the interest on it are likely to weaken the dollar to further levels, while proportionally boosting gold and determining a rise in its prices. Simultaneously, the intention of the ECB to increase interest rates as a solution to the debt crises in Ireland and Portugal, meant to appreciate the Euro, will most probably weaken the dollar and lead to a further increase in gold prices.

The best proof is the appetite with which investors are buying gold these days, being perfectly sure that the ECB measure can't affect their pet investment vehicle, unless repeated several times, with the European inflation of 2.6% and the ECB deposit rate of merely 0.25%. So, considering the negative real interest rates, investors will continue to rush to buy gold and silver, knowing that, by keeping their money in banks, they will get less profit than if trading the precious metals.

As regards silver, while it is being surely overbought nowadays, its prospects remain nonetheless bullish. For now, retail investors are still not as used to it as to gold as an investment means. But, considering its sales and soaring rates, one may soon see some physical shortages on the silver market.

And even if silver is overpriced now, gold is surely not, remaining much less costly than stocks. In conclusion, both precious metals have bullish prospects, considering the larger number of investors buying them, higher moving averages, higher closes and larger amounts sold. Therefore, buying gold and silver while you still can is a smart strategy (of course, if you know how to buy gold and silver), particularly with those menacing global events.

About the Author:

If you desire to find out How To Buy Gold then you will have to ask the advice of some professionals.

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