Trader sentiment turned bullish in the early stages of today´s precious metal trading as gold and silver both profited due to a slow in economic growth. Figures published in India and the Far East show positive signs for the yellow metal although much of the demand is due to stockists and retailers providing for the ongoing marriage season. In the Far East, Chinese traders have returned to the floor following the Lunar New Year holidays.
However, despite the external influence, analysts believe the rise of gold and silver is an indication of a global trend. In Singapore which often sets the standards for daily trades around the globe witnessed a 0.7% rise in both gold and silver futures.
Traders sticking with gold
Traders are turning to precious metals amidst fears of a slow economic growth. At the time of writing gold bullion bars are ringing in at $1275 per troy ounce – 0.7% up from its opening value. Investors can expect to enjoy a steady rise in gold prices for the rest of the week.
US job data published last Friday showed a growth of 116,000 new occupancies, but this figure falls way short of the estimated 170,000. As a result, the US Federal Reserve are unlikely to taper their stimulus program for a third month running meaning traders will stick with gold until the market stabilizes.
When Janet Yellen stands to address the House Financial Services Committee and the Senate Banking Committee, it will be her first time as Chairman of the US Central Bank, and given the market perception it won´t be the easiest speech she will ever have to give, but does give her the opportunity to lead the charge in driving the US economy forward.
In Europe, equities are holding firm as well, but investors are playing a balancing act and are not prepared to take too many risks until the global economy shows more signs of stability. All eyes will be on the Fed´s decision on bond purchasing this week. The likelihood of another $10 billion dollar trim seems unlikely at this stage.
Buy gold and silver bullion
Precious metals is recognized as a safe-haven investment against a weak economy, and despite signs of global finances strengthening, some national economies are still reeling from the banking crises that almost collapsed entire nations – particularly in the Eurozone. But it was the signals of global strengthening that caused gold to lose 28% of its value in 2013 and why analysts forecast prices to fall even further in 2014.
With gold prices at $1275 an ounce and silver at $20.16, precious metals are still relatively attractive commodities, but are expected to decline again later in the year. Providing the world can avoid any kind of catastrophe that affects the stock markets this year gold and silver will be excellent investments to add to your portfolio.
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