Gold Reaching New Records Daily, Silver Back Above $40

As the dog days of summer continue, gold and silver have seen tremendous activity to the upside in the past month and especially in the last week.

At the time of this writing, gold has shot up another $30 per ounce and is approaching $1670…silver is back above $41.

(Remember this spring and silver’s brief climb above $50? Could we be witnessing yet another run above $50?)

Why in the last month has gold gone up nearly $180 and silver around $7.70?

Will Rhind, head of U.S. operations for ETF Securities, points to concerns about a stalling recovery and perhaps another recession. Up until a few days ago, debt-ceiling negotiations in Washington were dominating the general upward trend in gold prices since probably the first week of July.

Add disappointing numbers on unemployment (…only 18,000 non-farm payroll jobs were created in June according to the U.S. Labor Department) along with news from China that growth there is perhaps slowing and you’ve got a potentially explosive mix of circumstances.

Sagging confidence in any kind of economic recovery seems to be the driving factor behind this increase.

Much the same is true with silver but it’s currently not in uncharted territory like gold. If bullion investors are primary drivers for demand and economic concerns are causing people to accumulate coins, silver can do very well. Proportionally speaking, silver has outperformed gold in these kinds of situations.

However, silver has the industrial demand equation to consider – since silver prices are also driven by industrial demand, a new recession will certainly trigger less industrial demand and put downward pressure on prices.

In the interview, Rhind basically seems very positive gold will be on an upward move for the remainder of the year. It’s hard to tell where gold will top out at this time before correcting for a bit. As you know from here on our investors’ blog and by looking at the charts, gold has been on this pattern of ‘2-steps forward, 1-step back’ for quite a few years now.

Silver is a bit murkier right now…a lot of it depends on who the principle buyers of silver are. If bullion is in higher demand, silver can see an upward climb like gold. If industrial demand is the primary driver, we could see silver prices fall a bit on lower demand.

Other market analysts are bullish on gold too with one stating the yellow metal could be at $1850 by the end of the year. Another analyst is quite bullish as well, saying deteriorating confidence in the economy plus inflation will drive gold and silver much higher.

Many analysts and experts agree gold and silver may be on the precipice of what’s they dub as a ‘breakout.’ The fact there hasn’t been a drop, or correction, after the debt-deal (…which is historically what has occurred) is fueling this speculation in the market that not all is well indeed – not only in the U.S., but China and Europe too.

Keep checking with us for current events and trends in the gold and silver markets. It’s hard to judge when the right time to buy is. If there’s a short correction once gold hits $1700, it may be the next best opportunity to acquire more physical bullion for slightly less money.