Market Update | 3 Fluctuation Factors

Gold and silver have held reasonably steady market rates for years on end. While the two differ vastly in price per ounce, values tend to follow nearly parallel to each other’s twinkling path. A gruesome US recession flung gold and silver rates into their second-highest peak on record in 2011, and after a slight and expected trickle downward, the two precious metals have remained rigid for over half a decade.

At the time of this writing, gold and silver are clocking in at the following:

Economies affected by the recession have since been on the upswing. But there are dominant factors that put pressure on the gold and silver price pendulum. Let’s take a look at how different situations are affecting the price of both gold and silver and future implications of potential scenarios.

Brexit and Concern Over EU Stability: Clear Path For Gold Spikes?

Periods of economic uncertainty open the floodgates for rising gold and silver prices. Historically, precious metals are age-old, trusted investments flocked to en masse as a safe haven to store and protect wealth—most notably when economies experience volatility. And there’s no better present-day example for a volatile economy than the disquiet conceived by Brexit.

The UK is set to divorce from the EU at 2300 GMT on March 29th, 2019. Besides the turbulent separation, there are difficulties and uncertainties weaved into nearly every aspect of the dissolution. Economic anxieties via Brexit are continuing to forge a clear path for safe storage in precious metals. This ongoing trend is apt to extend past the official point of separation.

US Dollar: Recession Risks and Past Trends

The US dollar is one of the more accurate reflections of variations in gold and silver pricing. When the dollar is resilient, gold prices historically weakened. When the dollar weakens, gold and silver values skyrocket—evident in the historic highs reached during The Great Recession.

An unprecedentedly volatile stock market and a growing wave of uncertainty in the US dollar has led economic experts to predict a looming recession—or at least an economic slowdown—for the United States in 2020. Systematic patterns indicate a plausible estimate that gold and silver prices would oppose a weakening US dollar should a recession or period of economic slowdown take place.

World News

In other news, there are suspicions of a low point in gold and silver being hit, stemming from a US fed decision to end a balance sheet reduction program earlier than expected. Some are saying that this move indicates a significant low point for precious metals, by which values would soar forward. This announcement as of the 25th of January may prove to be true, as gold hits over $1,300 US dollars—a landmark point for watchful investors.

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Article by Morgan Sliff | 28.01.2019