Where Does the Precious Metals Market Currently Stand?

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Whether you collect coins or bullion, investing in precious metals can be very enjoyable and profitable. The most successful collectors and investors go to great lengths to stay on top of current trends in the precious metals market. Like any financial market, there is no way to accurately predict precisely what gold, silver, palladium and platinum prices will do. By being as educated about the matter as possible, however, it’s a lot easier to make educated predictions that can pay off handsomely over the long term. If you’re not convinced about the unpredictability of the precious metals market, its current state is sure to serve as a strong reminder.

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Small Events have Big Impacts on the Precious Metals Market
The first thing to understand about the precious metals market is that it can be affected by seemingly small, unrelated events. The prices of metals like gold and silver are intricately linked to many other important economic indicators. A drop in value of a currency halfway across the world can make gold and silver prices drop everywhere else. In some cases, an event like that can make them rise too. The best investors are those who are willing and able to understand as much about the world economy as possible.

Will the Economy Rebound in 2013?
The U.S. economy has been struggling along for some time. Most experts agree that the worst is behind us, but that doesn’t mean the economy is truly in recovery mode. The ultimate test will be the first few months of 2013. Many people have their hopes pinned on how the U.S. economy performs in the early part of the year. The year is still very young, but the news is somewhat mixed. The economy doesn’t seem to be off to the robust start that many were expecting.
global economy
The state of the U.S. economy has a profound impact on the precious metals market. If you’ve invested in bullion or coins over the last few years, you already know this. The economy has been in very bad shape, and the precious metals market has suffered accordingly. Fortunately, other events in the world have helped to keep the precious metals market from experiencing a catastrophic nosedive. Still, people are hedging their bets that things will dramatically improve in 2013, but there are no guarantees. Many different things come into play when it comes to determining the state of the U.S. economy.

The U.S. real estate market offers clues as to the health of the economy in general. Foreclosures and short sales continue to be far more widespread than usual, but they seem to be slowing down in many areas. In some areas, in fact, housing inventory is actually tightening. As the number of available houses dips, prices may finally begin to stabilize and even rise. As housing values rise, consumer confidence should as well. Needless to say, consumer confidence can be enormously beneficial to the economy, and that’s especially true when the economy is showing signs of improving already.

The economy can’t hope to truly recover until unemployment levels drop to much more normal levels. That seemed to be slowly but surely happening, but the latest weekly jobless claims report is a little discouraging. As reported by Seeking Alpha, the latest jobless claims report shows that the number of claims rose by around 4,000 since last week. The new total is right around 371,000. This is disappointing to those who were hoping for exciting, positive news, but it doesn’t mean that doomsday is upon us. In some ways, watching reports too closely can be more trouble than it’s worth.

What will Bernanke Say?
Many investors are holding off on making any predictions or major investments until the much-anticipated speech by Federal Reserve Chairman Ben Bernanke has been given. The speech is expected to provide extensive information about how the Fed will move forward in 2013. Spending cuts are currently on the table, and his speech should reveal how extensive they be and how they will be done. The matter of raising the debt ceiling yet again will be covered as well. The aftermath of Bernanke’s speech is sure to provide many interesting clues about the state of the precious metals market.

Those who are watching the economy also continue to be concerned about the fiscal cliff debacle. Although the matter was seemingly resolved right before the dawn of 2013, the truth is that it isn’t even close to being finished. In fact, a lot is still up in the air, and the resulting uncertainty is having a major impact on investors’ confidence. With any luck, the fiscal cliff issue will be completely over and done with by the end of the spring. Until that happens, the economy and the precious metals market are sure to experience ongoing volatility.

The World Economy
For investors in the U.S., the state of the U.S. economy looms incredibly large. However, palladium, platinum, gold and silver prices are often impacted by events that span the entire globe. There’s no way to even come close to predicting what the precious metals market will do without paying attention to events around the world. Experienced precious metals investors know that currency prices often have major impacts on the values of gold, silver and other precious metals. The economies of other nations also often have major impacts on the market as well.

As always, many people are eagerly awaiting updates on the state of the Chinese economy. There’s no question that it has expanded; what remains unclear is by how much. If you’re concerned about precious metals prices, you should cross your fingers that the Chinese economy has expanded by a considerable degree. If the economy of China grows by an amount that exceeds most analysts’ predictions, the impact on the precious metals market is sure to be overwhelmingly positive. If the economy fails to grow by as much as analysts were predicting, however, prices across the precious metals market are likely to drop.

Events in other parts of the world are expected to leave marks on the precious metals market in 2013 as well. The Indian rupee has been rallying against the U.S. dollar. If this keeps up, demand for gold is sure to increase too, and gold prices should rise. Over in Europe, the ECB’s recent decision to keep the euro rate where it is drove up the value of that currency. As is usually the case, the value of precious metals rose along with the value of the euro. Whether the euro’s value will continue to rise or even remain as high as it is remains to be seen.

Educated Investors are Successful Investors

Although things are always in flux in the precious metals market, one thing never changes: The most successful investors are the ones who rely on reputable sources. If possible, set aside at least 30 to 60 minutes per day to study up about the current state of the precious metals market. If you’re unsure where to turn, Monex is always a reliable choice. Although some folks only do this research once a week or so, it’s a lot better to get into the habit of doing it daily.