Kamis, 18 April 2013

A battle with the dollar

Though gold and silver are no longer the currency of daily use, their prices dictate the current state of the economy. With the recent wave of recession and economies going on a roller coaster ride, the prices of gold and silver have been fluctuating too heavily. One of the main reasons for this is sentimentalism. Whereas these precious metals are rare and retain their original value more than most, are often considered safer investments in a volatile economy. That said, there has been a recent increase in the price of gold bullion and silver thanks to consistent level of purchase by retailers as investors.

There is also a strong demand for silver from the industrial sector, thus driving up the price. This increase is also aggravated by the amount of speculative purchases as well. An observation of the markets shows that even in the European markets gold seems to rule Supreme. Another rise to the increase in the price of these precious metals is that there is no ceiling on prices that can reach, simply because there is no ceiling on the amount of money that can be printed. This is based on the Federal Reserve’s announcement of America and fundamentally affects the way we go to international market prices.

This move to remove the ceiling is the one that acted as a catalyst. It was done mainly to ensure that the u.s. economy back on track. The idea is to move towards a kind of progress that will ensure an economy that have ample job opportunities and a level of price stability. One reason Federal Bank going this way is to deal with the pressure that is coming from opposing political parties in power. With America’s national debt, pushing $ 16 trillion, bringing down the value of the dollar seems to be the only way to break the impasse of the economy these days.

And because the prices of precious metals are directly related to the dollar, it is natural that we are seeing an increase in their price. This can go on ad infinitum and at a price level probably never seen before. But as the market eases off, there’s sure to be some sort of relief with more people selling the ingots and this provides a steady supply constant need and balancing prices.

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