Friday, February 25, 2011

How Silver Affects Gold, and Vice Versa By Rachel F Paiste

Gold has been trending up all year, well past the numbers expected by market analysts. And while some are now speculating that gold's run is coming to an end, others believe that there may be more space to grow for the red-hot commodity. Silver is also on the up and up, and, believe it or not, the two are interconnected in a massive metal web, with one profoundly affecting the others place in the market.

How can this be possible? There are multiple drivers that affect a stock's performance, including the miners and the global demand (which does change fairly often). And though one can often jump ahead of the other, sooner or later they meet back in happy equilibrium. If your 401k includes shares in the commodities market, speak with your financial advisor about what the changing silver and gold rates mean for you and your retirement planning. That way you and your certified financial planner can work together to make educated decisions about what's best for your personal finances.

Currently, silver is pulling ahead of gold. That's not unheard of, but the rates that its value is escalating are unprecedented. But when major holding companies order large quantities of silver, it sometimes takes months for the bullion to arrive after the paper purchase has been made. The slowness of the silver to come from the mining facilities to the funds that are buying them could affect the price of the precious metal in the future.

Thankfully for silver investors, that looks quite unlikely. Even if the metal is slow to arrive, between industrial and medical uses its value is huge. The trading price of silver will remain high as long as the demand does. Whether gold is riding silver's wave or on a high wave of its own is unclear, but either metal seems to be a wise investment at this point. If you are interested in buying silver or gold - or buying more silver or gold, speak with your financial advisor today.

Don't have a financial advisor? Fee-based financial advisors get paid only when your stocks make money, so an appointment to discuss options could be free!

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