Gold and Silver Prices Are Tumbling Ahead of the European Open
Gold and silver prices have been on an unprecedented tear in the past few months, with both metals making their third consecutive record monthly gains. But many people are wondering if these gains are a bubble — or, at the very least, a fleeting one.
The answer is probably both. The two prices have been surging on expectations that the European Union will adopt a restrictive trade agenda known as “co-ordinated policy” in October. But while this agenda is good for industry and global trade, it is bad for individual countries. As a result, the EU is expected to implement trade policies that are more restrictive than what most countries have. That could have a devastating impact on the EU’s small, but vibrant, gold and silver industries.
Gold and silver prices are falling ahead of the European open.
Unfortunately for consumers, gold and silver prices are also tumbling in the lead-up to the European market. But this article will focus on the plunge in gold prices, and the potential implications for the precious metals market in general.
The Gold Standard
The idea of a “gold standard” has been around for hundreds of years, dating back to the Middle Ages. But it was only after World War II that it became a real threat to the “free trade” ideals of the European Union.
As Europe’s factories and farms were passed out to American and Japanese owners, many European countries desperately tried to maintain their industrial base and keep up with the Joneses.
The result was the adoption of “co-ordinated trade” policies that were ultimately designed to prevent the later implementation of the Single European Act.
This included measures such as import tariffs, nontariff barriers and requirements that goods pass through national inspection before being allowed into the EU.
The Future of the Euro
Europe’s debt crisis has seriously dented the EU’s competitiveness and growth prospects. A combination of high unemployment and a poor economy has made European countries less attractive to investment and business, and this has sent interest rates rocketing through the roof.
This has led to fears that the Eurozone is on the verge of a debt crisis, and that the single currency could break up.
But not everyone is worried about that — at least, not yet. The Eurozone’s leaders are currently trying to come up with a solution to the debt crisis, and there is a good chance they will succeed.
So far, they have managed to stabilise the currency, but problems remain. And if they fail, it will be very damaging to the EU and global economy as a whole.
Why Gold Prices Are Falling Ahead of the European Open
On the surface, gold prices may not look too different from their usual levels. The price of gold is often compared to other markets, like the S&P 500, because that is what it is supposed to be compared to.
But there is a lot more to gold than meets the eye. For example, if the price of gold falls, it could be due to a number of things, including the general direction of the market, the European Union’s proposed trade policies and fears in the precious metal industry that the EU will impose more stringent rules on the trade of gold and silver.
How to Buy Gold and Silver
First things first, you’ll need to decide how much gold you want to buy. There are many different ways to go about this, but the most common way is to start with a reasonable amount and then work your way up from there.
If you are just starting out, a good place to start is with a few grams. You can always buy more once you have adjusted to how much you want to spend.
The amount of gold you buy will depend on a number of things, including your personal goals, your investment strategy and your risk appetite.
For example, someone interested in keeping their investment gains safe might want to start with a smaller amount of gold, while someone who wants to make faster returns might want to start with a larger amount.
5 Reasons Why Gold and Silver Are Down From Their Record Highs
As noted above, gold and silver prices are falling. It is important to note that these are not just market levels that have been reached, but historic levels that have been seen.
The Bottom line
At the end of the day, gold and silver are both valuable assets. And while they will always be compared against one another, it is important to remember that they are also two different assets.
One thing that is certain is that a fall in one will likely cause a fall in the other. So, while gold is still doing very well, it is important to remember that it is not the only asset that is doing so.