RSS FeedRSS

With the dollar weakening and interest rates at rock bottom, investors have turned to commodities in record numbers

November 11, 2010 – Is the strong performance of gold and silver investments a short term aberration or a sign of something more significant? Investors across the spectrum are concerned about the instability of the monetary exchange and cannot seem to make sense out of the global turmoil so they are converting their assets into hard commodities. Because they can be physically held, gold and silver are by far the preferred investments.

With the dollar weakening and interest rates at rock bottom, investors have turned to commodities in record numbers – with an unprecedented total investment today of $320 billion. In an effort to keep speculation under control several exchange operators are considering increasing the minimum collateral required to post futures contracts, another sign that the importance of gold and silver investment as a market driver is growing.

The stresses on global currencies that are causing the shift to gold and silver is a primary topic of the G20 summit. At the top of that list is the persistent fear that economic stimulus measures will trigger inflation and create asset bubbles in the much faster Asian economies as the floodgates holding back weakened western capital are opened. However, that is simply how capital flows in global economics – with or without stimulus driven currency adjustments.

None-the-less, we can expect Asian nations to take protectionist actions that could take us to the brink of a global currency war. There is little that the G20 can do other than treat the symptom. Only time – and lots of it – can provide the cure. The plain truth is that the global economy is in its infancy and there are many years of uncertainty ahead before it matures. Until then investors will continue to seek refuge in gold and silver investments.

Shannon King

Senior Staff Writer – GoldSilver.org

GS social media share img

Get Your Complementary Award Winning Guides Below

 Publish Real Money Magazine

 Publish Gold Investment Magazine

 Publish IRA 401K Kit Magazine

 Real Money Magazine