The precious metals market is in limbo at the minute. The charts barely moved in the Far East yesterday and the little gain it did enjoy was practically canceled out by New York trading. The yellow metal made just 20 cents an ounce.
However, slow trading was expected this week ahead of US job data which was released this morning – and the results were not encouraging. The world´s largest economy added just 113,000 jobs in January, significantly short of the targeted 170,000.
Despite the disappointing for January, there were some mildly encouraging signs. Unemployment in the US is now down to 6.6%, its lowest since before the 2008 banking crisis swallowed up small businesses. Economists are also pointing to the second and third quarter of 2013 when the US job market enjoyed a burst of economic growth.
Quantitative Easing query
The latest figures have raised question marks whether the US Fed will continue to trim their stimulus program next month. Despite poor economic data, policy makers reduced money printing by $10m for February despite signs the US economy was not as predicted.
If the Fed does decide to hold their position on quantitative easing when they meet next month, gold and silver prices will probably stay around the $1250 a troy ounce. If the monetary committee do pull back on money printing precious metal prices will go down.
The global economy is recovering, and although progress is slow, analysts are confident the machine will be firing on all cylinders before the end of the year. Forecasts published by investment banks all show a decline in gold and silver prices and many predict a continual decline for at least the remainder of the year.
Is it safe to buy gold?
Gold is the safest investment you can make – providing you get the timing right! To be certain of profits, buy gold and silver with a view to long-term gains. With prices of precious metals likely to fall over the course of the year this is a great time to add gold and silver to your investment portfolio.
When currencies are performing well gold prices always take a tumble so the current trend is nothing unusual given the global economy is showing signs of strengthening. After today´s proceedings it is clear that market sentiment is with equities and trades are expected to continue in the same vein.
Historically, price charts show gold always recovers as it is used as a hedge against riskier investments. Since records began, gold and silver has witnessed two massive spikes, one during the 1970´s oil embargo and the other following the 2008 banking collapse. Therefore another major financial disaster will send gold and silver prices soaring and market speculators are predicting the next crash will be even more devastating than the last one. Investing in gold therefore is the safest investment you will ever make!
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