Wednesday, August 10, 2011

Gold Price Rises and Oil Price Falls

Pension funds that invest in stocks in order to grow the funds of their members` contributions have started to buy gold to make up for losses in the prices of the shares they hold. With this week`s downgrading of the US`s credit rating from AAA to AA+, the Dow fell by a large margin and that is causing more movement into gold as a safe haven. In the case of pension funds, obviously the main intention is to preserve the value of the premiums paid by contributors, and since gold is a wealth preserver rather than a way to gamble and get rich quick, gold is a wise choice.

At the same time, in this video they mention that oil prices have been fallen because of fears of economic slowdown around the world. Silver tends to follow the price of oil, since its value too partly depends on economic activity (silver is used for many more industrial purposes than gold). Precious metals investors with holdings in gold and silver should consider these developments. Though in the long term, silver is most definitely going to rise much, much higher.

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