Gold and silver have both fared well on the first day of trading for this new year. Gold is up over 20 dollars on the day while silver has gained around a half dollar. An increased amount of physical buying as well as index rebalancing have both worked in precious metals’ favor while stocks have calmed down in comparison to their activity from a week or so ago.
Whether gold and silver will be able to build upon today’s gains or not is yet to be seen, but one thing that is for certain is that 2014 has gotten off to a favorable start for precious metals.
Back to Square One for Investors
Now that the holiday season is over for most of the world, normal trading will finally begin to resume. Despite today being quieter than normal on the trading front, investors are already beginning to return from their long holiday vacations.
Index rebalancing is being credited with giving gold and silver the boost they experienced today. Even though investors were enamored with stocks for the last month of 2013, most have sold off the gains they made and are reorganizing their portfolios for the beginning of the new year. Depressed gold and silver spot values are catching the attention of the investing world, something that is seen in the increased number of physical purchases over the past few days.
Physical purchases in Asia have picked up considerably as well, yet another factor contributing to gold and silver’s great start to the year. Stocks have been surging in the US over the past few weeks, but because investors are looking to rebalance their portfolios most will cash in on the gains made through stocks and reinvest in lower value assets, like gold and silver. After all, gold and silver spot values are so low at the present moment in time that many market experts are convinced the metals have nowhere to go but up. Nonetheless, however, fiscal issues in the US still loom and so too do concerns over whether the Fed will pursue more QE tapering measures throughout the course of 2014.