Gold and silver rates change in accordance to economic events, social conditions such as rioting and war, demand policy decisions, etc. Historically, investors have considered precious metals such as gold and silver to be secure investment vehicles. The prices of these metals usually go up when the conditions are bad. When the social and economic climate is healthy, with positive future projections, prices drop. To track the fall and rise in prices, you could compare historic pricing information against current major events and their relationship with wars, recessions, etc.
Generally, platinum and palladium respond to manufacturing demand pressures and do not always follow gold and silver. These are precious metals with values quoted alongside gold and silver. However, their price fluctuations are unlike gold and silver since they’re industrial items. Gold and silver, on the other hand, are more of investments.
For gold and silver, the American economy’s strength has a major influence on the prices. When the American economy is in bad shape with a weak dollar, prices rise often. Usually, the prices of gold go up first, since gold is a preferred metal for investment. Silver trades much lower than gold price, which could alter with time responding to changing market scenarios and also reduced supplies.
Exchange rate changes could lead to investor reactions, which may cause price fluctuations. Downward trends even out with rising precious metals price; upward trends happen to push the prices in the other direction. In case of stalling exchange rates, precious metals tend to hover over a small price zone. Investors could also respond to policy decisions and news on topics such as foreign investment, budget, industry regulation, etc.
Usually, depressions and recessions result in increased precious metal price speculations, since they’re considered a more dependable and less volatile investment during such phases. Investors see these metals as a value store, and could have more faith in silver and gold compared to other investment types. Rising prices could soar during extended economic downturns. With economies starting to get better, investors happen to sell their precious metals out, which could lead to a fall in prices.
Precious metals price studies, at times, indicate they change responding to major political events and natural disasters. Behind-the-scenes things reveal the events are usually intertwined to an exchange rate shift. Currency value changes could explain fluctuations in prices of precious metals, wherein the events aren’t directly responsible for value changes. Investors could closely monitor the news for signs the exchange rate is likely to take a down or up turn, and may prematurely sell or buy precious metals to attain an ideal market position.