Why are precious metals rallying?
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Why are precious metals rallying?
Global InterGold

 

Compared to other market participants, gold is ever-growing and occupying winning positions. Let’ dig this!

Major precious metals of our time

Precious metals are those limited in nature and featuring important properties: high plasticity, resistance to oxidation and corrosion. The main precious metals of the market are gold, silver, palladium and platinum. The two latter ones are more industrial metals, while gold and silver are broader in areas of use from investment to jewelry.

Speaking of gold and silver, the yellow metal is significantly ahead of the popularity of its fellow mainly due to a higher price per gram.

Are precious metals true money?

Centuries-old devotion of mankind to gold has made it more than just raw material. It has become a true embodiment of money, an asset, and an object of investment attention. Its functions are not equivalent to monetary functions, but gold really acts as a measure of currencies’ value.

Inflation and gold

One of the main factors affecting the price of precious metals is inflation, especially dollar one. In addition to the US currency, the euro and the Japanese yen work in close conjunction with gold. The rise in inflation in developed countries actively influences the growth of gold prices.

Other factors of influence

Undoubtedly, geopolitical unrest, military conflicts, economic downturns and other factors affect precious metals. This year we see a noticeable increase in gold rates: since the beginning of June, it has lifted over 10%. The main reasons for this rally were political risks in the US and the danger of military exercises in North Korea.

Any tension in the world arena drives the demand for safe assets, and it is gold that stands on the pedestal of investment interest, while currencies are absolutely unreliable.

Prospects of gold

Many experts predict gold prices growth to $1,550 by the end of the year due to rising inflation and instability of the United States and North Korea. Another factor in the flow of funds into gold could be a potential change of the Fed’s head in early 2018, which might cause changes in the monetary policy of the world's most influential regulator.

Read more news about gold and fresh trends in the market here.

 

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Published: 26.09.2017
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