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Gold Prices Experience a Three-Week Low, Silver Bullion Sales Soar

Updated on October 19, 2017

Gold prices fell to a 3-week low this Wednesday as the US equities continue to experience a rally, strengthening the US dollar. Analysts say that this has put a massive pressure on the future of gold, leading to a severe drop in its prices. The global prices have fallen down to about $1400 an ounce. The European stock markets too have recovered slightly after the poor growth data in the Eurozone.

The future of gold

The gold futures for June delivery fell by about 2% and settle around $1,390 an ounce in New York. The reason for this is that the US dollar is gaining strength, and in turn, it is turning bearish for the yellow metal. Analysts opine that gold does not have any significant amount of support between its current price and the previous low of about $1320 as on April 16. The Deutsche bank report suggests that the loss in the price of gold can be due to the institutional investors. They amount to about two thirds of the gold ETF holdings, and they withdrew in massive amounts as opposed to the retail investors, who have shown a great deal of interest in the precious metal, ever since the prices dropped. It could be seen as an excellent opportunity for retail investors to get adequate exposure to the precious metal, as the situation is conducive at the moment, to buy more of the metal.

Prices likely to decline

While the institutional investors have been selling their gold holding rather quickly when compared to the estimated timeline, the ETF positions are giving away quickly that gold prices are estimated to follow a declining trend for quite a while. The economists predicting a strengthening US economy would also mean further decline in gold prices. As a result, gold is one of the most sensitive commodities available in the global markets, owing to the FED's overzealous quantitative easing. As a result of all these factors, it would at least be another year before the gold prices begin to recover. In the mean time, it is an excellent opportunity for retail investors to get exposure to gold in any form possible. If the expert opinion is to be considered, it is a good idea to own physical gold over ETF, or gold futures.

Silver bullion sales soar sky-high

Like the gold prices, Silver too has been following a slowly declining trend of late. Yesterday, the silver prices declined to about $20 an ounce, while the US treasury bonds gained significantly. The sale of silver bullion however, is at an all time high, with demand cropping up for every silver bullion product that is currently available in the market. The American Silver Eagle coin sales crossed the 20 million mark on Wednesday. This is an event that has never happened this early in a year. Previously in 2011, the silver coins hit a 40 million mark for the annual sales, and it took well over 6 months, to cross the half way mark.


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