Precious metals challenge laws of gravity!
Gold is our savior against many economic woes; the likes of lack of confidence in the stock and commodity markets and high return assets, doubts of global economic recovery, inflationary fears and lack of trust in government bonds and other treasury tools. The golden cocoon has, throughout its extensive history, protected investors and their wealth.
The only feasible solution for investors facing the European government debt crisis, Chinese inflation and a weak global economy is none other than... gold! Capital poured into the gold market, as investors and speculators rushed for safe haven and alternative investments amid financial market instability.
As pointed in our previous reports, economic conditions made a favorable environment for new record highs in gold. The rising dollar was unable to subdue the effect of other weakened currencies that caused investors to seek shelter in gold.
Greek woes were more than enough to convince investors into demanding gold as an alternative investment against bonds, as were the falling American stocks worldwide. Dow Jones closed with a 0.34% loss yesterday, despite attempts of rising. European stocks preceded their American counterparts in the decline, while Asian stocks this morning are following the same bearishness, further bolstering demand on gold.
Gaining 2.39%, gold closed at record high 1231.40 in New York, after reaching a peak of 1235.30. London was also grounds for breaking records, where gold was set at 1222.50 in the PM Fix. Today, gold is the only precious metal that's taking a northern course as it reached 1232.90 at 2:34 EST after climbing to today's peak of 1234.00 in electronic trading.
Silver has been trading at the highest since September 2009, up by 4.49%, boosted by demand on gold and stock market fluctuations that encouraged speculators. The metal recorded a high of 19.42 in New York yesterday, before closing at 19.33, climbing more than $1 from London's 18.42 closing.
Today silver was under some corrective pressures ensued by speculative profit-taking, but remained above the $19.00 mark, as it is currently trading around $19.29. The same pattern was followed by platinum, as it rose to a closing $1703.00 yesterday to drop to a current $1695.00 today.
The drop in Chinese performance and industrial output in several other countries have had a negative effect on silver and platinum, noting the fact that these two metals are used in industrial operations apart from being precious metals. This deterioration in the industrial sector has mostly affected platinum, while sever speculative forces have pushed silver down near the $19.00 threshold.
We suggest gold may be reaching for new records over the short term, while silver will follow over the medium term. Heavy fluctuations are expected over the short term, due to shifting confidence in the financial markets, movements in the dollar index, price of oil and commodity performance. Yesterday, gold proved its ability to resist oil, the dollar index and financial market attacks.
Precious metals have demonstrated their potency as safe havens and even means of attaining profit as an investment asset. Corrective waves may erect from time to time, however the main course for precious metals (especially gold) is upward in these harsh times for the economy.