Precious Metal Enterprising
The high-frequency fervor of gold buying and speculative trading has crescendoed into a unified Pitch, a pitch that overwhelmingly illustrates the ever-growing demand for groups of metals that barely caught the attention of investors, banks, or even jewelers just a few years ago now dominate the global landscape for its acquisition.
The most pressing question and most important, is why? Why has this small group of metals now taken center stage in what is now being coined as the 21st-century gold rush?
Why are banks, insurance companies, sovereign wealth funds, hedge funds, individuals, and all manner of business interests feverishly acquiring this small group of metals, especially physical gold?
A group of metals that barely priced out at $12 and $300 per ounce now demand a price range for one ounce of silver at $19.00 and gold pricing out at $1200 per ounce spot price.
Could this be pure manipulation of the precious metals market or a developing trend that requires a more in-depth approach to properly understand the mechanisms that drive this unique commodity group, requiring a thorough investigation into the private world of the Precious metals industry is where we will start, as this direction will further reveal detailed information and is necessary to ascertain a plausible understanding as to why the possession of gold has become centerpiece among world governments and institutions?
Notwithstanding the good old USA’s gold buying and selling frenzy, as well as a growing population of concerned US citizens greatly concerned about the rapidly deteriorating condition of the nation’s economy and infrastructure among many other concerns, prefer to have gold and silver assets vs. bank offered financial products such as certificates of deposit or money market accounts.
Now back to the market.
The very basic sub-meaning of the word market in essence means manipulation, if demand dictates supply, then it is possible that the source of supply can be manipulated in increases or reductions using any number of reasons why the fluctuations of price in relationship to supply occur.
With this thought in mind, we can begin to understand that whenever a resource like gold or silver makes it is way back into an economic environment that’s in a downward spiral, off times illustrates the true nature of gold and silvers value when currencies devalue but furthermore reveal how governments avoid allowing precious metals a commonplace in the economic bloodline of its monetary policy for obvious reasons. One need only study a brief glimpse of global economies’ historical use of the metals to gain an appreciation of how precious metals were used as units of weights and measurements in standardizing trade or a resource equivalent to a currencies value such as salt, special herbs cattle, etc to ascertain the importance of how precious metals inhibited excessive paper currency creation, demanding that it proportionately be created in relationship to gold & silver production.
It is well documented that these metals hold up in value and importance about exchange and trade when nothing else would other than great relationships among families and communities for collective survival and well-being, and this standard has been established worldwide except for local weights and measurements primarily established for the indigenous communities use, which will vary from country to country in both weights and price.
A look into western standards regarding the primary precious metals industry reveals three critical areas that one must familiarize themselves with to begin turbulence-free navigation toward profitability.
1) HSBC Is the custodian of the Gold market
2) JP Morgan Chase & Goldman Sachs are the custodians of the Silver market
3) The LME (London Metal Exchange) is the clearing house for futures and options contracts on base and other metals with a cash value volume of $112 Million lots (2009)
It is these four entities that essentially influence the world’s precious metal market pricing of gold-silver-platinum and palladium.
There is also the precious metals spot market where traders and buyers determine when to buy and sell based on hourly and daily price points which change every minute of the day, this process serves as a value indicator.
From the LME options and future contracts include such instruments as SLV and GLD ETFs (Exchange-traded funds) of silver and gold options and futures, which allows for the purchasing of contract bets that prices will either increase or decrease of the precious metals earning a profit or a loss for the purchaser of these agreements.
In my opinion, this commodity group is less turbulent than the overall stock market in that it is a unique market with greater volume only second to the forex market, and is much less risky.