US Inflation Goes Ballistic. What will gold and silver do to improve
US Inflation Goes Ballistic. What will gold and silver do to improve the cost of gold is a changed by various effects international economic events that have happened in Europe.
Gold is suffering a major crisis, and Monday the prices of the yellow metal have fallen to its level lowest in more than five years. But what is the reason for this so drastic fall of gold in the international market and what trends experts predict?
According to reports the portal Market Watch, lately this precious metal fell 25,10 dollars, or 2.2 per cent, and now costs 1.106,80 dollars an ounce, after briefly reaching a low below $1,100 an ounce. This strong fall, in accordance with the director strategic of market of CMC Markets, Colin Cieszynski, was caused by a series of events and trends that took place the week last and that together caused a “storm perfect” for the gold.
CAUSES OF THE STORM FOR THE GOLD
1. lower demand for defensive shelters
“At the moment the risk of an imminent Grexit has passed”, and global political tensions also seems to have diminished since the signing of the agreement between Iran and the USA and the “resumption of diplomatic relations [of US] with Cuba”, said Cieszynski.
2. less need for safeguards against inflation
Them plans of Iran’s return to the market of the oil in the middle of a “war continuous” between others producers have caused that the price of the oil has fallen again to 50 dollars the barrel. That means “it is likely that inflation follow moderate for some time”, explains the specialist.gold.
3 increase in interest rates of US and the advance of the US dollar
The risk of financial crisis in Europe has diminished, “keeping the Fed on course toward the take-off of interest rates”, said the expert.
4. china and purchases of gold
Last Friday for the first time since 2009 China unveiled data on its holdings of gold. These have increased since then by 60 percent to 1.658 metric tons, “which would have been very good for gold”, not to be that this metal represents only 1.5% of the reserves in China’s currency, a percentage that has not grown in the past six years.
Director of Gold Newsletter, Brien Lundin, for its part, pointed out that gold may not be at its absolute minimum, but “is not very far from it”.gold. However, Lundin has also emphasised that “is not expected that the decline in prices is much more prolonged or last for an extended period”.