Fears of slowing global growth and how it will affect commodities have caused many investors to dig their heels in the ground and resist owning natural resources. Perpetuating this negative investor sentiment is the constant 24/7 news cycle punctuated with pessimism.
Inflation – everyone's worried about it. Central bankers worry there isn't enough, drivers worry there's way too much at the pump, and Wall Street's bag carriers worry they only see it in private-school fees, not in their pay packets.
Spot gold dealings commenced the new trading week with a loss of $6 per ounce and the yellow metal was quoted at $1,767 on the bid-side. Silver prices fell by about a dime per ounce and initial indications came in at $35.32 the ounce in the white metal.
Commodities have a long and storied history of boom/bust/boom, with supply and demand alternately racing past each other as the lag times for developing new supply assure too much at some point and too little at others.
The light metal's ductile and durable properties allow for a variety of uses. On a daily basis, the world consumes beverages packaged in aluminum cans and depends on vehicles - whether bicycle, train, plane or automobile - made from aluminum.
The new, abbreviated trading week got off to a mixed start in the precious metals' complex. Gold fell $4.00 on the open and was quoted at $1,535.10 and silver added 38 cents to open at $38.45. The stellar performance, however, came from noble metals.
Still, what's all this historical, statistical rubbish worth if you're out 25% in silver or 5% in gold today? Less than a $50 call on June silver, perhaps. But bubbles are about speed, not longevity. And prices of gold and silver have enjoyed both.
Commodities staged a modest comeback late on Thursday and into Friday morning as a slightly weaker US dollar drew a few courageous bargain hunters into the ring looking for an opportunity for a short-term buck-making opportunity.