Gold & Silver Hit 3-Week High

Gold and silver made somewhat surprising moves Monday morning when the respective metals’ spot prices climbed to three-week peaks. Last week’s U.S. employment report was slightly more positive than analysts had anticipated, and in such situations gold and silver tend to lose value on the following trading day. Today proved to be quite the anomaly, however, with the gold spot price climbing $9.60 and silver’s spot price jumping $0.12. As of 2pm Texas time gold was trading at $1311.20 per ounce and silver was pegged at $19.58 per ounce.

Fluctuation of gold and silver spot prices has been more prominent in recent weeks than during the first few months of 2014. Both metals lost more than 20% of their respective values last year and skepticism was abundant during the first few weeks of 2014. Volatility has been high due to mining accidents and strikes, ambiguous goals on behalf of the Federal Reserve, and mixed economic data. “Despite the heavy demand in the physical gold and silver market the lack of interest in ETFs, combined with the possible manipulation of spot prices by big banks, has caused precious metals investing to look like a hit-or-miss venture,” said analyst Rich Patton.

“Investors seem to be catching on to the fact that even though stock indices are near all-time highs the money that the Fed is pouring into paper markets is driving a lot of those gains,” Patton said. “Now that the Fed is pulling back on QE it could force investors to ask themselves if recent stock market gains are sustainable or just a by-product of quantitative easing.” Patton also said that many U.S. investors are probably aware of what happened to gold and silver prices in the 1970s when interest rates started to rise.

“Gold did over 1000 percent in the 70s during the same time frame in which there were over 100 interest rte hikes. Cash accounts, stocks and bonds all suffered while gold and silver investors were rewarded for understanding the correlation between inflation, interest rates and gold.” Patton and encourages all investors to call 800-394-3337 for a free copy of the 2014 Insider’s Guide to Gold & Silver Investing.

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