Today was an encouraging day for gold investors. The precious metal rose above $1,100 an ounce, breaking above a 100 day moving average. Silver also managed to climb out of its rut as it continued to climb above $14 per ounce, breaking its 50 day moving average.
The reason for these dramatic moves is no mystery. Investors are placing their bets on these safe haven assets after several weeks of frightening economic news. Today saw the Dow briefly plunge 500 points, the S&P 500 reached its lowest level since February of 2014, and nearly 1,400 stocks on the New York Stock Exchange fell to 52 week lows.
Global economic news isn’t looking any better either. China recently reported its slowest economic growth in 25 years. Oil prices continue to fall, and global shipping is dead in the water. In fact, there is so little demand to ship goods, that it is now cheaper to rent a dry bulk tanker than it is to rent a Ferrari.
However, it’s hard to say if precious metals are finally ready to break out. Gold and silver have had little bumps like this before that didn’t amount to anything. But market fears are the greatest drivers of precious metal demand, so if the global economy continues to take a beating in the months ahead, then we will likely see a new gold rally in the near future.
Written by Joshua Krause
The Daily Sheeple