Vulnerable Precious Metals Prompt Spread Bettors to Tread Carefully

By mosesbet · Filed Under Market News Comments Off on Vulnerable Precious Metals Prompt Spread Bettors to Tread Carefully 

Spread bettors who have a lot at stake on precious metals should tread carefully in the coming weeks. While wholesale market prices of gold have risen even as stock prices remain at previous levels, silver has not fared as well. The price of this metal has dipped slightly this week and continues to remain subdued. According to analysts, gold is vulnerable as well and only time will tell if its can consolidate its position in the coming weeks.

Lack of Drivers Keeping Prices Subdued

Analysts believe that the lack of drivers in the market is impacting precious metals quite significantly right now. This is the primary reason for metals, including gold to stay low after recent price dips. The physical market has not reacted to the price fall either. Normally, a fall in price would be immediately followed by an increase in market activity centering around improving demand. This would shore up prices once more bringing the balance back into the market segment.  This has not taken place in adequate measure yet.

Silver in a Downtrend

Silver, which is another popular precious metal for investors is in a definite down trend. The metal is clearly faring poorly when compared with gold which is still holding its own as of now. Analysts describe the silver downtrend as being a short term one but only time will tell for sure.

Government Toeing a Cautious Line

The U.K. government appears to be toeing a cautious line under these circumstances with the decision to leave interest rates at the same level as they have remained since early 2009. Apparently, the decision makers have no intention of sparking off any change in the economic conditions owing to how precariously the country is poised right now. Predictions of a second recession in the U.K are still making the rounds with unfortunate frequency.

Spread bettors banking on the U.K. economy should also know that the country’s deficit is now £12.9 billion, more than twice what was predicted in the consensus estimates. Lower tax receipts have been the main cause for this mismatch, it is believed. While a shaky economy does translate into strong demand for precious metals, the recent dips in gold price are giving mixed signals as of now.

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