From its lowest Sunday night depths, at $1535 an ounce, the gold price has now risen $130. Silver, which touched $26 an ounce, has risen $6.75. That's 8.4% and 25% respectively with prices quoted as of the time of this writing.
As I alluded to yesterday, it seems the best times to buy or to sell, gold or silver, come when most of America sleeps and has no chance to take advantage. With New York often referred to as the financial capitol of the world, you wonder how the financial suburbs can create so much price volatility. All I know is that I spoke with a number of people who would have liked a shot at adding metals to their portfolios at the lows reached late Sunday night.
Now the question, will we have another shot at buying low or are prices on the rebound? This morning Bertha Coombs, reporting from the commodities trading floor, gave us some trader insight. She said the sentiment on the floor is that nothing has really changed from last week to this week. She specifically referred to the debasement of global currencies still underway. If domestic traders saw no reason for the price drop, I think we can conclude they were not the ones selling off.
Certainly, throughout the world, there remains a number of triggers, that could set off a buying spree tantamount in magnitude to this recent sell-off. Greece is still not settled as more and more experts speak of imminent default. Such an event could send another wave of investors to the safe haven of precious metals.
Continued weak economic data could also renew discussion of additional quantitative easing - something Fed Governor Sarah Bloom Raskin alluded to yesterday in her comment that such could be warranted. A new video speaks of the potential for a double dip in our economy to destroy the dollar as the world's reserve currency. To learn more watch The End of The Dollar Video now.
Then there's always the surprise announcement from some central bank that they just bought tonnes of gold. I would not be surprised to hear that it was happening now, right before our very eyes.
As I continue to assert, nothing has changed. Nothing can change overnight. We are years away, maybe more than a decade, from a housing recovery, jobs are not being created, earnings are dwindling as the positive effect of job elimination on corporate bottom lines is beginning to wear off and consumer sentiment is in decline.
All the events that have influenced a rise in precious metals prices over the last decade are beginning to intensify. I expect global gold demand to continue rising. As prices rise along with demand, there will always be periods where the metal is overbought and oversold. The pendulum swings both ways.
It's more important now than ever to stay in tune with the economic conditions that surround you and hold your savings and retirement hostage.