6 Factors Affect And Will Continue To Affect The Price Of Precious Metals-www.11aabb.com

Writing-and-Speaking 1- Feelings of Fear: Fear could be probably the most important and most .mon cause of dramatic rise in precious metal price. Reasons of fear such as unemployment, wars and economical instability will direct consumers to possess precious metal as a means to defend them from economic uncertainty. Our governments may aggravate the situation by taking political and economical faults and this will increase our desire to secure our future by getting gold. 2- Inflation: Inflation is actually a rise in the general level of costs of goods and services in an economy over a time frame. As inflation rises, every greenback will purchase a smaller percentage of a good. For instance, if the inflation rate is 2%, then a $1 pack of gum will cost $1.02 in a year. It is basically the fear of inflation and not the inflation by itself which drives the gold and silver price up. 3- .petitive Devaluation: This takes place when a country tries to devalue its currency to increase its international level of .petition to strengthen its exports. Even though, this typically encourages other nations to also devalue leading to only temporary increases in the .petitiveness of exports. In .petitive devaluation, a country only gains a short-term benefit until the following country devalues too. Lowering value of fiat currency will directly result in a rise in precious metal price which will continue to increase. 4- Precious metal Supply and Demand: Supply and demand for gold during times of financial crisis, have conflicting effects on the rate of gold and silver: On one hand, there is an urgent desire to sell gold to receive hard cash together with reduced power to buy precious metal due to the lack of cash, this has a negative influence on gold price. On the other hand, fear and uncertainty cause traders and investors to purchase gold and this has a optimistic effect on the price. However, the overall impact of economical crisis is generally positive on gold rate. 5- Seasonality: Knowing the seasonal differences in gold price might help gold investors in choosing the most optimal time to purchase or sell precious metal. Gold and silver rate has a tendency to fall during summer and rise in the autumn. 6- Precious metal Price Manipulation: There is a controversy regarding the presence or power of gold and silver manipulation by governments or major institutes. Some believe that the gold and silver price is manipulated or at the least controlled by central banks. The US along with other governments did try to suppress the Gold price from 1961 to 1968 through what was referred to as the London Gold Pool. The US alone persisted in attempting to do so until Nixon devalued the Dollar and closed the gold window in 1971. At this time, there were only 3 billion ounces in life and all the gold in the world was worth only $105 billion ($35 x 3 billion = $105 billion). Nowadays, there exists around 6 billion ounces, worth $10 trillion ($1,650 x 6 billion = $10 trillion), almost 100 times as much. And governments own about a billion ounces, only 16% of it, whereas the last time they tried to manage the rate they owned about 1.1 billion ounces, which was about 35% of the world source. And the governments, their central banks and essentially all big .mercial banks are bankrupt; they’ve vastly significantly less financial strength than they did in the times of the London Gold Pool. Why would they try to do a thing that’s so obviously a losing game? About the Author: 相关的主题文章: