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Gold And Silver

3 February 2010 – As precious metals start to overcome a recent rally by the US dollar, gold and silver prices are poised to make big gains. Inflation, private sector demand, central bank demand and the looming currency crisis are all factors that if they hit, can be key in driving gold and silver to never before seen levels. This information is crucial to anyone who wants the chance to profit while investing in these metals.

Inflation can be the friend of gold and silver investors; since 2001 and with only modest inflation, gold has quadrupled and silver has nearly tripled. While the US Federal Reserve is currently keeping interest rates low, the danger is increased inflation or even hyper-inflation, a situation which would be a potential boon for investors.

Second, demand has stayed strong among individuals, exchange-traded fund holders and numerous central banks. In order to have a serious rally on gold or silver, demand is an important factor. This is one thing about a rally; prices won’t increase without demand, and demand is still strong for both gold and silver, rising nearly 15% since the third quarter of last year.

Finally, the impending currency crisis plays a big part in the expectation of higher gold and silver prices. Iceland has already had a fiscal meltdown; Greece, Portugal, Spain and Ireland are on shaky ground and even the United States and Great Britain are having money problems. If there are more sovereign currency failures or even much of a delay in recovery, the weakened states of many currencies will provide fuel for more possible increases in gold and silver prices.

Many analysts are predicting much higher gold and silver prices, some claiming amounts that have never been imagined, much less stated. Investors should consider adding bullion and certified coins to their portfolios, especially with gold and silver poised to make big gains. 

Shannon King

Senior Staff Writer – GoldSilver.org

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