Gold and silver continue to slip in the AM hours of Thursday as there is more or less a perfect storm of world economic factors that are putting immense downward pressure on both gold and silver. Everything that could possibly be working against precious metals at this point is working against precious metals. Whether it be a strengthening US Dollar, surging stock markets, or a simple lack of investor interest in safe-haven assets, gold and silver are just not doing well. By about 10:30 AM on Thursday gold was down closer to 15 dollars while silver’s losses were closing in on 20 cents on the day.
Continued Decline
Over the course of the past few days it is no secret that both gold and silver are taking fairly large, and sustained hits in value. If you take a broader view of precious metals’ market trends, however, you will see that this decline is not limited to only this past week, or even solely the week before it either; it has been ongoing for the past few months.
If you look at gold’s spot value since November of last year, you will see that it’s spot value has been on a fairly steady decline. During this almost 7 month period, gold peaked at over $1,750, and is currently falling further and further below the $1,400 mark. This $300+ loss over the course of half a year is disheartening to those who have their fair share of gold holdings. One of the major factors causing this collapse that has not been seen in many years is the fact that world stock markets are now becoming much more idealistic places for investors to put their funds.
As risk on the open stock markets is becoming increasingly mitigated, investors see no reason why they should have to put their money into hard, safe assets such as gold and silver. It is not so much that people do not trust gold and silver as an investment, as much as investors think they can earn more money, faster by investing in certain stocks.
Weak Worldwide Demand
Perhaps another reason why gold and silver have not been performing too well as far as spot value’s are concerned is because of weak worldwide demand. Historically around this time of year physical demand for gold in Asia is very high due to a string of holidays, but this year the sentiment is a different one.
Though demand for gold and silver is low, this decline that we are in the midst of can be more blamed on economic factors worldwide. It is not so much that the economic situation around the world calls for investors to shy away from metals as much as the world economy is confusing investors to the point where they don’t even know what to do. Every day it seems as though the stories from parts of the world such as the United States and the European Union contradict what was reported just a day earlier.
Today is a perfect example of that as yesterday there was dismal economic news whereas today the news was that the EU countries recorded a substantially positive trade surplus this past March; something that has not been done in the region for quite some time. So long as economic news comes back as confusing as it has been, you cannot honestly expect investors to act consistently one way or another.
Price Movement
Gold started the week at $1,472 and as of about 10:30 Am on Thursday it was at $1,388, which was a loss of about $84 so far this week. Silver, on the other hand, started the week at $23.95 and as of the same time on Thursday it was down about a dollar and 25 cents to $22.70.