Market Volitility, Gold and Silver’s Reaction

Gold and Silver’s Position in a Volatile Time

Recent market volatility for U.S. and European stocks has not been felt in the two big metals.  Both gold and silver have remained a stable investment in the past few weeks as investors pull back from the uncertain financial markets.  Silver prices have risen, and gold is holding steady.  Economic activity is one of the major driving factors that drives the price of silver because of its many industrial uses, and with world markets contracting some investors expect to see further pull backs from silver.  On the other hand,  many investors think that the “poor man’s gold” will not drop as dramatically as other global economic indicators.  Gold prices dropped dramatically from highs near the $1,900 an ounce level into the $1,600’s with investors fleeing to the dollar as Europe questions the future of the Euro, however, the yellow metal has leveled out to a steady rebound with less dramatic swings in daily price changes.  Silver also fluctuated from highs at or around $50 to lows around the $26 dollar level.  Silver’s swings were due in part to arbitrary changes in margin requirements by the major exchanges, and also by a perceived decrease in global demand.  Since rebounding from its recent lows, silver has remained fairly stable in the low to mid $30’s per ounce.

Local Louisiana Perspective

Those who are selling gold and silver to the precious metal buyers in Baton Rouge have expressed their concerns about the often discussed bubble in metals, and are increasingly positioned to cash in their investments.   In general, many individuals in Louisiana that have purchased gold or silver as an investment, or those who are holding surplus or broken jewelry have experienced a fair increase in their holdings over the last few years.  Feedback from our customers in the Baton Rouge area is somewhat balanced between those who think prices are still on the rise and those who are eager to sell before prices take a tumble.  Given the relative stability in both metals throughout a highly volatile market, prices may continue to remain fairly constant relative to the stock market or even real estate.