Dealing Desk Update: Silver – a shining opportunity?

May 1, 2014·Roland Khounlivong

The precious metals market still lacked a clear direction this week as geopolitical concerns with the Ukraine situation remained, but the US Federal Reserve re-affirmed its faith in America's economic recovery. The widely expected reduction in tapering by the Federal Open Market committee was announced on Wednesday.

Head of Dealing at GoldMoney, Roland Khounlivong said profit taking was again the main trend this week, with trading volumes at the online precious metals trader up 50% on last week as investors return from Easter holidays. 'The interesting story of the week though is the gold/silver ratio which is now at its highest level since August 2010 (67.64). We saw gold and silver both being sold in equal measure this week, but it's the volatile silver which has suffered worst.

'The US Federal Reserve's assertions that economic recovery is on track has pulled investors away from safe haven assets, and the only gains we've seen are in platinum and palladium which are benefitting from the geopolitical factor and the potential increased industrial demand.

'Tomorrow (Friday) will see the US April Employment Situation figures being released which could give some further direction to the market, and next week the European Central Bank meeting will continue the focus on economic recovery news. In the meantime it will be interesting to see how far the gold/silver ratio can go before silver starts looking like a good buy again.'

16:00 01/05/14: Week on week performance: Gold fell 0.7% to $1,280.46; Silver lost 3.5% at $18.93; Platinum gained 0.9% to $1,415.51 while Palladium also added 1.8% to $811.22


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Historically gold has been an excellent way to preserve purchasing power over long periods of time. For example, today it takes almost the same amount of gold to buy a barrel of crude oil as it did 60 years ago which is in stark contrast to the price of oil in terms of national currencies such as the US dollar.

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