Precious Metals Continue to Rise amid Demands on Currency Value Preservation
Precious metals, alongside the slumping dollar and rising crude oil, witnessed huge purchasing pressures throughout yesterday's trading, and continued throughout the Asian Session today. Investors head towards precious metals as a safe haven, following the dollar’s decline and rising crude. However, the dollar may be considered to be the most traded currency in financial markets and numerous investments around the world, alongside commodity trading, which is directly linked to the dollar; where greenback’s depreciation correlates with its weakening purchasing power parity, thus, making traders head to precious metals to preserve of their holdings.
The relationship between precious metals and inflation is directly proportionate; where it stems to the purchasing power for the currency rather than inflation. However, the dollar’s decline, next to the surging unemployment rates and rising crude, it spurred similar conditions to inflationary effects on consumers, causing the purchasing capacity for each individual to decline.
Global commodity indices inclined yesterday trading, where we see the S&P GSCI incline by 3.11 to close at 457.38 in New York; whereas, crude inclined to currently trade at $71 per barrel, thus supporting the precious metal’s rise.
Meanwhile, gold inclined in New York last night by 1.49%, closing at $1017.00 per ounce, this incline came after London's closing at 1005.50; silver sharply inclined to close at 16.62 rising by 2.97%; whereas, platinum witnessed a gain of 1.17% to close at 1294.00, after reaching its highest at $1305.00 per ounce.
Seemingly, confidence in financial markets seems to have returned, where main stock indices inclined in Europe and the U.S. yesterday. As for today, we also find Asian stocks closing in the green zone, following U.S. data that showed the services sector expanded for the first time in over a year. All of this, alongside the unexpected hike of Australian interest rates, encouraged investments.
Strong buying demand entered the metals market in the form of investments and speculations, and not only as a demand for refuge due to the dollar’s weakness. Today, we find that gold has inclined by 0.38% around $1020.50 per ounce at 2:21 EST; whereas, silver inclined by 1.44% to trade at 16.86; and platinum followed silver to incline 0.39% to trade at $1299.00 per ounce.
Silver’s appreciation, in particular, assures ongoing speculations on precious metals, where we are accustomed to major speculations on silver for the wide daily trading range, providing lucrative profits opportunity for investors.
Expectations as still favoring further gains for precious metals; where gold is heading towards new historical records over the medium term. One of the main assurances that the global economy is heading towards recovery, is Australia’s interest rate hike, alongside strong expectations for many nations to have expanded throughout the third quarter of this year. All that indicates a high possibility for inflation to start rising from prevailing record low interest rates, alongside the unusual financial policies, which continues to support precious metals to rise further…