Gold And Silver Spot Prices Signal Caution
Judging by the recent behavior shown by the spot price of silver and gold, we can see that the demand for precious metals has leveled off a bit this month after starting the first quarter of the year with a bang.
Some of this can be attributed to the rising value of the US dollar. At the beginning of the month, the dollar was looking like it was in very bad shape as it was flirting with a three-year low in value. Since commodities are priced in terms of the dollar, they become more attractive when the dollar is weak and less attractive when the dollar is strong.
While the rising strength of the dollar may be driving commodities lower, there still remains significant concern about inflationary pressure in the currency. Until the US dollar is out of the woods so to speak, precious metals will have increased appeal to those seeking to protect the value of their wealth with safe haven assets.
