Despite the fall in price of precious metals, gold and silver are still good investments: China Mineral Company Report.
Precious metals including gold, silver and platinum have dropped in price. The rise of the US dollar has affected the price of gold causing a sense of uneasiness within the precious metals market.
The price of gold and silver were at an all time high during March which caused an unprecedented buying surge. Even countries such as India, who traditionally favour gold, were also buying silver in large quantities. But, with a rising dollar, gold and silver are now deemed less valuable as an alternative asset which may lead to a move to back to favouring cash investments.
The rise in the US dollar is partly attributed to Greece's need for an additional 60 billion EUR from the EU's reserve fund in order to bail them out of financial trouble. There has been speculation that EU leaders may not consent to giving Greece extra aid, which would mean they would have to reassess their financial situation. It is, however, predicted that the rising dollar will even out in the near future. In the mean time it is recommended to hold gold, silver and platinum in a variety of currencies as a hedge against the rising dollar.
Statistics for May's gold contract delivery show that gold has dropped by 1.1% with silver also declining but at a higher rate of 4.3%. The decline in value of precious metals has instigated predictions that the time to start selling gold, silver and platinum is close at hand.
It has also been reported that the deterioration of the price of silver is partly reliant on China's threat to raise interest rates in order to curb inflation. Silver is more commonly used in industry, in addition to copper and the threat of rising interest rates among the globe's largest producer and exporter of goods has weakened the value of the two metals.
Gold, silver and platinum, however, are still tremendously favoured as a hedge against a poor economy and precious metal prices are still sitting comfortably. Investments in all precious metals are still said to be stable.
