Converging Market Conditions Spur Bullion Sales While 2010 has certainly proven itself a fascinating year to those watching the ups and downs of modern bullion and precious metals markets, what are perhaps even more interesting are the factors which underlie these movements. There have been, and still exist today, circumstances present in related markets which dictate the value of precious metals.
Unemployment
For a score of reasons, most of which are fairly obvious, the condition of the job market has a direct impact on the sale and purchase of precious metals. For the investor, low employment figures suggest sluggish growth for business, which translates to slow growth for the economy. In addition, high unemployment is indicative of low investment on the part of business owners, which also hinders business growth. Each of these mechanisms hinders the development of investments which traditionally compete with precious metals. According to the latest (August) unemployment figures released by the Bureau of Labor Statistics, unemployment remains unchanged at about 10% nationwide, with levels reaching 15% in certain regions. For the reasons listed above, bullion investors are taking these developments as a clear "buy" signal.
Housing Sales
A widely-known bumper sticker reads "housing = jobs." Unfortunately, the inverse is also true. As home-building has come to a screeching halt over the past 2 years, jobs in related industries from plumbing to carpet manufacturing have been lost, further contributing to our nation's unemployment woes. What's more, the creation of housing for the purpose of investment was a side-effect of our nation's recent experiment in excess. Because of the present glut in housing, real estate investment has lost its allure all but completely. No longer does gold or silver compete with homes for investment dollars. The U.S. Department of Housing and Urban Development conceded as recently as the end of August that housing sales have all but ceased, and continue to average about 10% lower than monthly estimates.
Stimulus Plan
Regardless of one's individual feelings on the government's recent injection of trillions of dollars into the economy, it should be clear to him that spectators, by and large, aren't convinced. In fact, the belief held by many that the printing of money to spend our way out of trouble will in fact do more damage than good is clear and tangible. The Dollar recently hit a five-week low against the Euro, shaking confidence in the greenback worldwide. Investors are pulling out of Dollar-denominated assets as they fear that the stimulus plan will continue to erode the value of the Dollar.
Gold Picks Up the Slack
Because assets which traditionally compete with precious metals are simply not performing, investors worldwide are turning once again to the comparative security of precious metals. This is clearly manifested in the recent all-time record levels reached in the gold market. At over $1,280/oz., there isn't much else to consider. Call (813) 482-9300 to speak with a bullion broker, or visit Gainesvillecoins.com learn more about how to invest in precious metals today.
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