GOLD
Gold dipped below $1,800 this week amidst fears of soaring interest rates. There are an array of factors currently impacting the price of gold. The demand for precious metals in global markets is an important determiner. The supply of money in the markets is another factor influencing gold. Other significant factors affecting the gold price at the moment include:
- Federal interest rates
- The value of the US dollar
- Central Bank reserves
- The use of gold for hedging currency devaluation and inflation
This week, the bullion price dipped due to a decreased supply of money in the markets.
At the moment, many Iinvestors are vying for treasury bonds and the greenback. This is being led by fears of a possible recession in 2023. This has put the metals markets, but particularly gold, under pressure. The dollar has traded steadily after registering a five-month low just a few days ago. Also, the 10-year US treasury yields have experienced much consolidation. A combination of these factors has put the bullion market under pressure. At the moment, the popularity of the dollar has impacted the price of gold.
Silver
The silver price soared this week. Silver, like other commodities, is driven by speculative push and supply and demand forces. Going by current recessionary trends, investors have rallied behind silver as a reliable store of value. This preference has led to higher demand for physical silver bars and coins. The other thrust in the silver market has come from the industrial sector. Considering that gold is overpriced compared to silver, many investors take advantage of this arbitrage opportunity by selling their gold assets in favor of silver. In 2021 the demand for silver touched 1.029 billion ounces. The last time it surpassed one billion ounces was in 2015. Historically, silver has outperformed gold many times. The current gold-silver ratio indicated that now may be a prudent time to invest in silver.
Platinum
Platinum has indeed emerged to be a star in the current market. The price of platinum has risen 23% since September. During this period, platinum has outperformed both silver and gold. There are some supply concerns owing to disruptions in Russia, one of the critical suppliers of platinum. This uncertainty has caused upwards movement in the platinum price. The 2023 platinum forecast by the World Platinum Investment Council has projected an imminent platinum deficit in the world markets. Going by the rising demand for cars in the post-COVID world, the requirement for platinum will rise even further. The automobile sector will vie for more platinum next year. Thereby, investors should expect platinum prices to jump.
The markets for precious metals favor investors this week. With tamed gold and burgeoning silver and platinum, it will be sagacious to invest in precious metals now. Investors especially need to look out for platinum and silver bars and coins.
