“All that shines is not gold” is how the saying goes, but in the matter of Silver and Gold Price, they’ve changed things up.
Gold has been a beacon of hope for decades and centuries and the legacy seems to be continuing to this day as well.
Gold has been shining throughout the year and its recent performance from the lows to the rise in momentum upwards in September suggests that it’s an asset you can’t miss out on!
On the other hand, Silver has a few interesting stories to tell and isn’t far behind its cousin Gold either.
Not only does silver have significant monetary importance but it also stands out as an industrial metal with a wide range of applications. Silver’s presence in Jewelry, silverware and various other objects is notable but the price dynamics are largely influenced by industrial demand and also investment demand.
With a brief idea of this, let’s dive into the main crux of why silver and gold might be volatile in 2024. Read on as we uncover the secrets and hear a special message from our Founder and Head of Research, Mr. Ankit Kapoor.
Volatility Creating Factors in Gold Price and Silver Price:
- Geopolitical Tensions: Fueling Market Uncertainty
Ongoing geopolitical conflicts, particularly in sensitive regions like the Middle East, are significantly shaking up the global markets. Whenever there is political unrest or conflict, investors tend to seek refuge in safe-haven assets such as gold and silver. These precious metals are viewed as shields against the market’s unpredictability.
If we look at historical trends, geopolitical instability consistently leads to an increased demand for gold and silver. Prices tend to climb as investors flock to these assets, driving up their value in the market. This pattern is clear today, where ongoing tensions are causing sharp movements in metal prices.
- Economic Factors: Inflation and Interest Rates
With inflation on the rise globally, investors are growing increasingly concerned about currency devaluation. To hedge against this risk, many are turning to gold and silver, which are historically known to maintain value even as fiat currencies decline. Central banks have been accumulating gold reserves, further boosting demand and, consequently, prices.
The Federal Reserve is expected to cut interest rates in 2024, which could weaken the dollar. In periods of a weaker dollar, non-yielding assets like gold tend to become more attractive to investors. This heightened appeal contributes to the upward pressure on the gold price.
- Market Speculation:
Speculative trading plays a massive role in the daily movements of the gold price and silver price. Traders often react quickly to short-term market news, further amplifying volatility. This speculative nature can cause price swings in both directions, making the market more unpredictable.
The Fear of Missing Out (FOMO) is a powerful driver of market behavior. When prices start to rise, a wave of rapid buying often follows as traders and investors try to capitalize on the upward momentum. This rush to buy adds fuel to the already volatile market, pushing prices higher at a rapid pace.
- Supply Chain Disruptions:
In addition to geopolitical and economic factors, supply chain disruptions are a critical aspect affecting the availability of physical gold and silver. Whether it’s due to conflicts, trade barriers, or economic downturns, these disruptions can lead to price spikes as supply becomes constrained.
During the COVID-19 pandemic, we witnessed firsthand how fragile global supply chains can be. When supply chains were disrupted, demand for gold and silver quickly outpaced the available supply, leading to sharp price increases. Such vulnerabilities can still impact markets today.
A Perspective from Commodity Samachar:
The Gold price and Silver price trajectory is one that needs to be tracked this 2024 cause there is a lot of potential that traders could take advantage of. By staying informed, using hedging strategies, and carefully timing their trades, they can turn this volatility into profit while safeguarding their investments.
Watch Mr. Ankit Kapoor, Head of Research and Director of Commodity Samachar Securities explain about the situation of volatility in the country and also ways in which Traders can take advantage of this situation by checking out our video now!!
That’s all for today folks. We’ll be back with more interesting articles like this soon.
Until then, Happy Trading!
Commodity Samachar Securities
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