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Gold And Silver in 2012


As precious metal markets finished the 2011 year with a strong showing in green territory, many traders are looking for a similar outcome in the 2012 trading year. Just analyzing the numbers makes  it clear that both gold and silver have preformed better than most asset classes  in 2011. At the start of 2011 Gold was trading right around the $1400 mark while finishing the year around the $1550 level–showing gains of over 10%. Silver, on the other hand, experienced an overall downturn of around 7% for the 2011 year—staring the year above the 30$ mark  while ending the year near around the 28$ level. Although silver did not end the year on a positive note, there were many opportunities to make money with the white metal. For example, you would have enjoyed an %80 gain in silver over just four months if you sold the metal in April when it was trading above the $45 mark.

Volatility was a main characteristic in both the gold and silver markets in 2011; and traders believe that more of the same will occur in 2012. As worries mount in Europe, major pressures are put on the currency markets–which in turn puts both up-ward and down-ward pressure on the precious metal’s markets. Furthermore, the massive public debt in the United States (which is now 15+ trillion (more than the country’s GDP)) has put extreme pressure on the world’s reserve currency, the U.S. dollar. Advocates of the Federal Reserve’s “loose money” policy argue that inflation will eventually creep into the market. Such inflation, they argue, will ultimately rear its ugly head in the gold and silver markets.

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