|Gold And Silver Remain Extremely Undervalued |
Los Angeles CA, (Tangible Investments) - by James O'Dell - Gold and Silver prices were slightly lower in early trading on Monday, the last trading day of the month, with Gold easing 0.57 percent to $1,127.30 an ounce after gaining $8.00 or 0.71 percent on Friday to finish the week at $1,133.80 an ounce, while the yellow metal remains on pace for a monthly gain, and a rebound from a 5-1/2-year low. The price of Silver dipped 1.02 percent to $14.47 an ounce, after rising $0.10 or 0.69 percent to close at $14.62 an ounce on Friday, as the Gold/Silver ratio inched up to 77.55.
The week began on what social media was calling "Black Monday." The dollar was down 1.1 percent, a two month low, against a basket of major currencies, as investors priced out a September rate hike and China stocks continued to tumble. Gold added to highs as the Dow Jones Industrial Average quickly plummeted more than 1000 points shortly after the opening.
“Markets are nervous — and this is always good news for Gold,” said Gavin Wendt, of Mine Life Pty, in an e-mail. “True investors have once again used market weakness as a tremendous buying opportunity, reinforcing my positive view on Gold.”
On Tuesday, markets saw gains after the People’s Bank of China (PBOC), China's central bank, cut interest rates and reduced lenders’ reserve ratios for the second time in two months. “The injections through open-market operations and MLF [Medium-term Lending Facility] failed to bring borrowing costs lower,” said Kenix Lai, of Bank of East Asia Ltd.
“That’s why the PBOC has had to make such an aggressive move. It was unexpected to have them cutting both interest rates and RRR,” added Lai. "If those trends continue, then certainly it will create some short-term pressure on Gold prices as the initial fear in the marketplace that we saw yesterday dissipates," said Standard Chartered’s Nicholas Snowden.
Commerzbank reported on Wednesday that Chinese consumers stepped up Gold purchases in July as prices slid. Gold fell below $1,100 an ounce last month for the first time in five years, as imports from Hong Kong climbed to 55 metric tons. “This was nearly 50 percent more than in the previous month, in which imports were rather weak,” said Commerzbank.
Noted newsletter writer Dennis Gartman, in his Thursday commentary, said that commodity markets should soon see a turn for the better. “This is especially true given the stunningly pervasive press coverage of the collapse of the commodity markets,” said Gartman, before adding that the weakness of the past few days which has taken Gold, in terms of the dollar, down from $1,165 to $1,125 seems, “a bit extreme.”
HSBC remains convinced that the Fed will not hike interest rates at the September 16-17 FOMC meeting, but will instead delay a rate hike until the December meeting. “Gold prices have fallen for the last 18 months against a backdrop of higher rate expectations,” said analyst James Steel. “Delays in the first such hike are likely to be supportive.” Gold and Silver remain extremely undervalued when measured against a host of markets including stocks, bonds and many international property markets.
It's important to protect your hard earned wealth during these times of economic and geopolitical uncertainty, and at Tangible Investments it doesn't matter whether you're new to precious metals or a seasoned veteran, you will always be dealing with top industry experts.
Take a moment and browse our vast selection of valuable collectibles, then call Toll Free 1.800.741.5014 today and let the helpful staff at Tangible Investments assist you in your next purchase or sale. Tangible Investments is the leading buyer of rare, Gold and Silver coins, art, antiques, diamonds, sterling and flatware. We also loan against anything of value and offer more money at half the loan cost.