Will Gold and Silver Continue to Heat Up?

The prices of gold and silver rallied in the past couple of weeks to their highest levels in over a month. Are gold and silver on a verge of comeback? Will their rally continue in the coming months? Let’s analyze the latest news that may affect gold (GLD) and silver (SLV) prices.

Despite the recent rally in the prices of gold and silver, the demand for leading precious metals’ ETF including SPDR Gold and Shares Silver Trust haven’t recovered. During October, the SPDR Gold’s holdings fell by 3%; Shares Silver Trust’s silver holdings fell by approx. 2.5%. The developments in the U.S economy could shed some light on the drop in demand for gold and silver as investments.

FOMC’s monetary policy

The highly anticipated FOMC meeting back in September ended with no change to the Federal Reserve’s policy and it continues to purchase long term securities at a pace of $85 billion a month. But even if the Fed had cut its purchase program, this would have had little adverse effect on the prices of gold and silver.

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Disclaimer: The author holds no positions in stocks mentioned and does not plan to initiate positions within 120 hours of the posting of this article. This article is to be used for educational, research and informational purposes only and does not constitute investment advice. There are no guarantees, expressed or implied, of future positive returns in regards to the subject matter contained herein. Understand the risks inherent in investing before making the decision to invest or consult an investment professional for more information. Reasonable due diligence has been performed in regards to the information in this article. However, the author expressly disclaims any liability for accidental omissions of information or errors in fact.