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The price of gold and silver dropped slightly in trading after Standard & Poor’s reported Tuesday is would downgrade fifteen of the European Union nations.

December 7, 2011 – The price of gold and silver dropped slightly in trading after Standard & Poor’s reported Tuesday is would downgrade fifteen of the European Union nations. It currently has warnings out for the other two and has officially on November 29 announced it will downgrade the credit rating of thirty-seven global banks, including fourteen of the largest banks and brokerage firms in the US.

The price of gold and silver, even as a summit meets in Brussels to attempt to resolve the European sovereign debt crisis, is reflecting the move by Standard & Poor’s. The action triggered long liquidation, which put downward pressure on the markets.

This movement of the metals is slightly different from what some analysts were predicting after last week’s Federal Reserve agreement with central banks around the world to swap dollars at a lower rate. Indeed, the week did start with precious metals, gold and silver, taking a pop at open, but very quickly these other factors weighed on the price.

All downward moves in the price of gold and silver in this market signal buying opportunities. The long-term trend line still shows gold and silver outperforming every other asset. Gold has been running circles around stocks for years now and has had a 600 percent decade. In that kind of dynamic, buyers ask simply what is the price they would like to purchase gold and silver at.

There is some talk of market fundamentals opening the possibility for a correction, or significant move lower in price, but it is as yet unquantifiable and only a possibility. Even if a correction did occur, as one did in September, it would still, in this market, represent an opportunity to get in. It was recently reported that central banks bought gold following the September correction at forty-year highs. They are still buying gold.

Whatever the effect of the summit currently meeting in Brussels and whatever subsequent economic policy, if any, they put into effect, gold and silver will continue to outperform all other assets as a long-term investment. Any decrease in the price of gold and silver is an excellent opportunity to purchase.

Shannon King

Senior Staff Writer – GoldSilver.org

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