Due in large part to the recent strengthening of the US dollar, gold and silver are now looking to overcome lower demand in order to start their anticipated rallies. Sovereign debt concerns in a number of countries has given the dollar some newfound clout, and left gold and silver looking for buyers.
have been carefully watching the performance of certain Exchange Traded Funds as they experience outflows of gold and silver from their holdings. This outflow has been attributed to renewed interest in the dollar, which has rebounded over the past two months against the Euro and other currencies, and is now over 80 on the US Dollar Index.
Exchange traded funds offer exposure to trade precious metals as an asset without have to receive the metal itself. This is a good indicator of the market performance and is a trend watched by many people.
Since many economists believe that the dollar’s strength cannot be maintained due to a weak economy, gold and silver appear ready to make a move. As the dollar loses value, gold and silver prices tend to go up since current demand for both metals is extremely high and the value of each would be higher in real money spent if the dollar drops.
In spite of a two month downswing, gold and silver look to be ready for an increase when the dollar falls and passive demand for precious metals resumes. Gold and silver prices closed up on Monday and an upward rally could present an opportunity for investors to add to their holdings of bullion or certified coins in an effort to profit from any increase in precious metal prices.
Senior Staff Writer – GoldSilver.org