When the gold spot price sank to a low of $1087.70 this morning, a great many individuals were no doubt wondering, “Is the gold and silver cycle over?” Their answer soon became evident when the spot price began to climb, and eventually regained $1100 per troy-ounce levels, reaching as high as $1110.50, before leveling off at around $1107 later on. Silver also continues to teeter between $15 and $16 per troy-ounce levels. The dollar showed more signs of life against the euro by reaching 81.02 on the index, but there are too many uncertainties in the global economy presently, to prompt thoughts that the gold and silver cycle is over.

The economic world still awaits word from Ben Bernanke, or some other Federal Reserve official, about raising interest rates in the near future. The Reserve Chairman instead focused on Greece’s economic crisis, and the Fed’s intentions of investigating alleged corporate misdoings pertaining to that nation’s financial woes. Raised interest rates would ultimately be likely to stimulate the gold spot price, and silver prices also tend to increase, as investors diversify their precious metals.

There is also the matter of the not-yet-sold gold that the IMF (International Monetary Fund) is currently holding, with the rumor mill split between India and China, as the two most likely buyers. The yet to be purchased bullion (191.3 tonnes) represents approximately five percent of the annual global gold demand, so a buy of such magnitude could also propel the gold spot price substantially.

Investors are encouraged to complete their research, and then to contact one of our friendly specialists, who offer institutional discounts on gold and silver bullion, and rare coin to household investors like you.

Shannon King