Recent Gold and Silver Price Highs

Gold prices jumped to the new heights this summer as investors were trying to find a way out of the possible effects of the lowered US credit ratings and debt crisis. The recent riots in London and debt problems in European countries also pushed the pedal in favour of gold and silver but the continuous weakening of the dollar is the major reason of rising gold /silver prices. Dropping dollar raised the attractiveness of the gold as a safe haven. In this chain, Gold gains also jumped the prices of precious metals like silver and Palladium to its highest level in history of humankind.

Gold also benefited from the economic optimism led investors which were ready to buy assets perceived as more risky. According to Afshin Nabavi, head of trading at MKS Finance, "The market is nervous”. Any large transaction seems to disturb the market temporarily. Although in general, it seems just a sign. In America, the Dow Jones drops 5.6%, drop of 634.76 points is the sixth-largest in the history of this index. The NASDAQ suffered a bump even greater (6.9%) while the rest of the world markets saw significant losses. Even yesterday, the Nikkei dips and the Hang Seng dropped 4% and 7% respectively.

Last Thursday, The dollar fell to a minimum of 14 months from a group of currencies in support of actions which encouraged the demand to get away from more risky assets like dollar or stocks. This weakness of the dollar supports the gold commodity. The gold price has almost doubled since the economic problems which began in late 2007. A weaker dollar makes the metal attractive for holders of other currencies. Similarly, Silver is another beneficiary of weaker dollar.

The other reason for this Gold rise is the lack of convincing alternatives for investors. Investors want the best for their savings / earnings. Due to fluctuating markets, safer assets like gold and silver gained the attention of these investors. This phenomenon outnumbered the sellers in the gold market and an old market formula which is based on demand and supply of market, came into play.

In London, the ounce of gold also rose to achieve a new all-time high, also due to the investors seeking refuge from the fluctuations of financial markets. Commodity silver trading also rose with strength and reached to the highest value in 30 years.

The climate of financial concern that splatters the market these days has made investors to come to gold and try to get greater profitability to the money that they have invested in other places, such as the stock or currency. Traditionally gold and silver is an investment that more tends to use as a refuge when there are no other options very clear in the stock market or currency.