Gold & Silver Prices Fall 1% Each on Consolidation

Gold and silver prices fell by approximately 1.2% each Monday after riding to a 9-week high on Fed tapering concerns and renewed interest by mom-and-pop investors. Gold is up 3.3% in the last 30 days while silver is down more than 2% during the same time, and both metals are still far below 2013 levels. Gold is down 24% year-over-year while the silver spot price has fallen 36%.

Some analysts have predicted that the gold/silver ratio will soon turn in silver’s favor, but notwithstanding a few rallies here and there silver has been a stellar disappointment for most of the last two years. Proponents of the white metal believe that the lower entry threshold for silver as opposed to gold could increase silver’s popularity with household investors who see silver as both an investment and a possible competitor to the dollar.

Silver has been unable to keep its head above the $20 line but gold’s firm demand, especially in the physical market, has helped it establish itself above the $1200 mark…at least for now. The Fed recently announced that it would begin trimming its $85 billion per month quantitative easing program at a rate of $10 billion per cut, but no firm dates have been announced for the cuts themselves. As the Fed eases the nation off its teat and raises interest rates gold could skyrocket if inflation has already taken hold of the dollar, as many economists believe.

Some financial institutions have lowered their expectations for gold and silver prices in 2014 but others believe that spot prices could rebound if demand for gold and silver coins and bullion remains strong. For regular updates on the gold and silver markets select your free, no-obligation investing guides below.

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