Interested in the option to buy silver bullion and profit in the New Year? Over at Mineweb, the headline suggested, “was the year end gold and silver price slump overdone?” As in, was the predicted downfall of gold price and silver price (which did actually did occur) way over hyped? Indeed, the price of both precious metals fell as the U.S. dollar seemed to gain. Silver dropped below the $30 mark and gold sank below $1,500.
Besides the increase of the American dollar, other factors bringing on this negative change include problems in China, India and in the Eurozone. The newest factor is the weakness of the rupee, which continues to make gold and silver expensive—and that can sometimes translate into fewer investments, fewer demands from manufacturers, and thus lower prices.
You also have to consider other factors before you buy silver bullion or gold coinage, and that might include year-end movement, such as year-end book balancing, and the fact that gold and silver aren’t actually faring so badly in other countries, including India, where the gold price hasn’t fallen nearly as much as the dollar gold price. So, while gold and silver have fallen to a low in recent months, there is no evidence that it has actually fallen in worldwide value. Another issue to think about is that economic growth in China is actually slowing for the first time in years, and the housing market is continuing to show decline. China’s silver importing is down 30%, while exports have increased substantially.
What does all of this mean for you? As the headline suggested, don’t let anyone “overdo” the slump, as in predicting bad news for gold and silver price. Most experts doubt that they will plummet in price any time soon, since they are both considered universally important. In fact, plummeting in price would mean that the precious metal itself would be losing value, and that’s not likely.
The price you see quoted is decided upon by various market factors and only reveals what people are willing to pay for gold, not really what it’s worth in terms of worldwide value and trade credit. Is money the same way? No—you never hear what paper currency is worth. It either appreciates or depreciates according to inflation. This is because gold and silver are commodities not “money” in the truest sense of the world. Despite coinage being recognized as legal tender (which is needless, since the price of precious metal is much higher than legal tender) commodity is priced much differently. It reflects market price, but is actually decided upon by supply and demand issues.
For more on how to buy silver bullion this year, talk to a coin dealer!