Economic Conditions Require the Purchase of Precious Metals!
Unemployment levels soured in the world's largest economy above 10% for the first time since 1983. Unemployment reached 10.2% in the U.S.; however, the U.S. economy and other major global economies are facing trouble with the effect of the deepest economic recession seen since World War II. Despite of major economies showing signs of stability, we find that economies are still extremely weak; thus, calling for demand and speculation on precious metals.
Gold closed with gains last Friday; meanwhile silver did not witness any change between opening and closing, despite of the volatile fluctuations; platinum on the other hand, fell noticeably. This condition reflected investors' opinions in the global economy, at a time economic fundamentals assured the weakness of the U.S. economy; hence, the weakness of the rest of the global economy.
Meanwhile, gold closed last Friday's session at 1096.90, the highest record in history, where it managed to rise by 0.68%; however, it managed to set its highest throughout the session at $1102.30 per ounce. Investors head towards gold for a number of reasons; the deterioration of the U.S.'s interior economy, where the U.S. Federal Bank stated that interest rates will be tied to the labor and inflation conditions, and not only dependant on improvement in GDP growth which set investors' expectations for rates to linger low for quite sometime. That means that the dollar's fall will direct traders to purchase gold.
On the other hand, we see that traders heading towards gold as well in today's session; where gold recorded a gain of 0.87% rising towards $1106.40, precisely as of 02:15 EST. Consequently, gold recorded a new historical high that had reached $1107.35 per ounce; whereas trading is near the record highs, indicating the continuation of gold's incline.
The U.S. dollar continued to endure losses today against a basket of foreign currencies; whereas crude has majorly compensated today from the plummet that was seen last Friday, returning to trade around $78 per barrel. These conditions were, and still are, appropriate for investors to keep their money in precious metal markets.
Despite of crude plummeting last Friday to $76 per barrel, and in spite of the stability stock markets witnessed; we see that gold managed to advance, notwithstanding the fact that global commodity indices fell on Friday's trading session. The major decline the S&P GSCI index faced, which was 11.40 points, did not offset gold's attractiveness. However, these facts call us to see that gold was and still is a safe haven and hedge preferred by investors in a perfect market; thus, causing gold to shine brightly in financial markets and continue to rise!
In comparison to gold, platinum and silver's trading is a little more volatile, where despite of signs of recovery appearing in economies and some industrial sectors, they still remain weak; reflecting on platinum and silver's trading last Friday, where silver stabilized and closed at 17.39 after sharply trading between $17.64 and 17.26 per ounce; whereas platinum fell strongly and closed at 1343.00 plummeting by 0.89%.
Silver today was able to achieve a major leap, as did platinum, where both of them spiked; silver rose to $17.71 per ounce and platinum towards $1356.00 per ounce. This incline was due to the optimism overshadowing markets, which will prevail if interest rates remain low. However, if this optimism is true and interest rates do manage to remain low and cause the global economy to improve or not, is still the major fuel of speculation in financial markets; that only echoes their understanding that we do recognize the hazardous U.S fundamentals yet we are still optimistic and so shall it be!!!