Gold and Silver Market Update (7/27/14) – Golden Eagle
This week has been an unsettled one for precious metals, with repeated price swings but no major movement at the end of the period. Silver and gold both rose as soon as the markets opened on Monday; gold then went into a gradual fall while silver prices stayed close to the week’s high – until Thursday, when both metals fell sharply. On Friday they both climbed again, with the gold price closing within one percent of last Friday’s figure and silver prices slightly down overall. Platinum followed almost exactly the same trajectory as gold. Palladium managed to buck the trend though, steadily losing ground for most of the week then jumping sharply on Friday to finish the week around $8 up. Industrial demand for palladium is strong thanks to increased demand for new automobiles, and that probably explains the buoyant spot price.
Precious metal prices have held up surprisingly well given the current economic situation – with stocks rising, the US dollar starting to regain its value against other major currencies and consistently positive monthly employment figures since the start of the year there’s no real reason for investors to stay with a traditional hedge like gold or silver. There’s also a strong possibility of a rise in oil prices in the near future, with Iraq and Russia – the second largest proven reserves and the largest exporter – both looking at possible disruptions thanks to the ISIS insurgency and the threat of US and EU sanctions against the Russian economy.
Despite that plenty of people have been holding on to their existing metal and even buying up more. Why’s that? Probably because the economic recovery, while definitely under way, still looks slightly shaky in places. Modest growth had been predicted for the first quarter of 2014 but instead the US economy actually contracted, and growth in Q2 isn’t expected to have done any more than claw back what was lost through the winter. There’s also some unease about unsafe debt in southern Europe, specifically in Portugal, with the country’s second largest bank potentially in trouble. Another debt crisis in the EU would likely cause a wave of panic in the banking industry and chill the credit market, which in turn would slow spending and stifle growth. It could be that enough investors are worried about these two issues to sustain an upward pressure on metals.
From the point of view of what to do, that depends on what your goals are. If you’re looking at precious metals as a long term investment then right now it looks like hanging on to your gold, silver and platinum is the best bet. Consider buying whenever the spot price dips – there have been some bargains available in the last two weeks. If you’re hoping for a short-term payoff, however, this probably isn’t the right phase. On the other hand palladium looks a lot stronger in the short term and with continued demand the price could hit $900 before too long. It’s an interesting time for precious metals, that’s for sure, but there’s a lot of potential if you play your cards right.
About the Author: Clint Stelfox
Clint is the director of marketing at Golden Eagle Coins. Son of Richard Stelfox, co-founder of the company, Clint has been living and breathing coins his entire life. After trading for a Philadelphia Stock Exchange firm for several years Clint returned to give Golden Eagle the online presence it has today. 
