Sometimes this correlation with major currencies is negative (e.g. the euro is in an upward trend while gold is in a decline). However, it does happen from time to time, that the Australian dollar quotes have a positive correlation with the GOLD chart (both going upward, for example).
The global supply and demand of Metals has a significant impact on their value. Thus, with the increase of demand, the prices of Metals rise, and vice versa – when the demand is weak, the value of Precious Metals declines. However, this effect occurs mainly in the longer term, and does not change the short-term prices.
Issues with Precious Metals production or new investment into the business are things that can cause corresponding market fluctuations. E.g., the price of Silver depends on the main factors of the global economy – inflation, GDP growth, refinancing rates and decisions made by the global central banks. During periods of economic upheaval, Precious Metals prices jump, as more and more investors seek to protect their capital from febrile changes in the foreign exchange market.
Moreover, experts say that Silver is not an unlimited resource which means that its price will constantly increase over time – so, the analysts predict a further upward trend.
As a rule of thumb, gold and silver, react negatively to the growth of stock indices, at which point the attractiveness of Precious Metals as a ‘safe asset’ decreases.
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