Savvy, successful investors know that markets fluctuate and so they plan their investment strategies to accommodate market fluctuations. Smart investors also understand the reasons behind market fluctuations, making sticking through the lows of the market easier and anticipating the highs more likely. When you understand the market and the it’s never ending fluctuations of highs and lows, you can make smarter buys, know when to sell and come out on top in the financial game. While some markets are unpredictable, gold and silver price fluctuations have some influencing factors you can watch to take some of the guess work out of the equation and buy, sell and trade smart.
Since ancient times and across all cultures, gold and silver have been valued, treasured, sought after and honored as currency. Today’s market is not much different than those of times gone by and gold and silver remain a precious commodity, the only real difference is the way their value is determined. Similar to many commodities, silver and gold price fluctuations are often based on speculation, supply and demand. When demand is high and supply is low, the spot price of gold & silver will rise and sellers can get top dollar for their gold and silver shares.
One determining factor in the price of gold and silver is who holds the supply. Large scale investors can drive market prices by buying large portions of the available gold and silver supply creating demand and driving prices up. With immense budgets and buying power, large scale traders and investors can corner the silver and gold market making the commodities extremely scarce. Once the market is cornered supply is low and demand is high, these investors can sell their shares, bars and other silver and gold holdings at a high profit.
Another reason silver and gold prices fluctuate is tied to the strength of the dollar. When the dollar is weak, many investors will put their money into gold and silver as a type of financial insurance knowing that they can ride out the weak dollar by investing in precious metals. Once the dollar regains its strength, investors can sell off their silver and gold and enjoy the profits. Many seasoned investors look at purchasing gold and silver as a safe investment, knowing that if there was a global financial market crash or catastrophe, those that hold the commodities will survive the crash and come out on top.
Gold and silver prices changes are also often tied to hyperinflation. When inflation kicks in and paper money loses some of its buying power, investors often turn to precious metals like gold and silver to protect their purchasing power. In times of high inflation, commodities like silver and gold tend to hold purchasing power more efficiently than paper money. Owning commodities such as gold and silver can help protect investors from the effects of hyperinflation and prevent financial losses by protect purchasing power making gold and silver an attractive option for smart investors.
When markets are unstable and global investors are skiddish, gold and silver prices tend to rise. Since gold and silver are valued everywhere, investors know buying into these commodities is a safe investment. While internet stocks, telecommunication stocks and other technology investments may plummet in value if the public does not embrace them, gold and silver are always in demand so investors feel comfortable buying them. While other markets may stagnate or stall, the gold and silver markets enjoy increased value and growth because buyers know gold and silver will always be valued and desired.
Understanding the global appeal and demand for silver and gold helps explain why gold and silver retain their prices and make a sound investment. Whether you are looking to finance short term or long term goals, gold and silver are great options to help get you there. Always in demand and able to withstand the rise and fall of global markets, gold and silver are smart commodities to add to your portfolio. Even when gold and silver prices dip, you can rest assured knowing their value will soon rebound and give you a great return on your investment.
If you are interested in investing in gold and silver, you have lots of options and should speak with a financial adviser to see which ones best fit your needs. Whether you buy coins, bars, stock or even shares of gold and silver mines, understanding the ebb and flow of gold and silver prices will help make you a savvy, successful investor. Ancient empires were built on gains from gold and silver and you can build your fortunes in the same way with strategic investments and a basic understanding of the gold and silver market.