The high frequency fervor of gold buying and speculative trading has crescendo into a unified Pitch, a pitch that overwhelmingly illustrates the ever growing demand for a groups of metals which barely caught the attention of investors, banks or even jewelers just a few years ago now dominate the global landscape for its acquisition.
The most pressing question and most important, is why? Why have this small group of metals now taken center stage to what is now being coined as the 21 century gold rush?
Why are banks, insurance companies, sovereign wealth funds, hedge funds, individuals and all manner of business interest feverishly acquiring this small group of metals especially physical gold.
A group of metals which barely priced out at $12 and $300 per ounce now demand a price range for one ounce of silver $19.00 and gold pricing out at $1200 per ounce spot price.
Could this be pure manipulation of the precious metals market or a developing trend that requires a more in depth approach to properly understand the mechanisms that drive this unique commodity group, requiring a thorough investigation into the private world of the Precious metals industry is where we will start, as this direction will further reveal detailed information and is necessary to ascertain a plausible understanding as to why the possession of gold has become center piece among world governments and institutions.
Notwithstanding the good old USA’s own gold buying and selling frenzy, as well as a growing population of concerned US citizens greatly concerned about the rapidly deteriorating condition of the nation’s economy and infrastructure among many other concerns, prefer to have gold and silver assets vs. bank offered financial products such as certificates of deposit or money market accounts.
Now back to the market.
The very basic sub meaning of the word market in essence means manipulation, if demand dictates supply, then it is possible that the source of supply can be manipulated in increases or reduction using any number of reasons why the fluctuations of price in relationship to supply occur.
With this thought in mind we can begin to understand that when ever a resource like gold or silver makes its way back into an economic environment that’s in a downward spiral, off times illustrates the true nature of gold and silvers value when currencies devalue but further more reveal how governments avoid allowing precious metals a common place in the economic blood line of its monetary policy for obvious reasons. One need only study a brief glimpse of global economies historical use of the metals to gain an appreciation of how precious metals were used as units of weights and measurements in standardizing trade or a resource equivalent to a currencies value such as salt, special herbs cattle etc to ascertain the importance of how precious metals inhibited excessive paper currency creation, demanding that it proportionately be created in relationship to gold & silver production.
It is well documented that theses metals hold up in value and importance with regard to exchange and trade when nothing else would other than great relationships among families and communities for collective survival and well being, and further more this standard has been established worldwide with the exception of local weights and measurements primarily established for the indigenous communities use, which will vary from country to country in both weights and price.
A look into western standards regarding the primary precious metals industry reveal three critical areas that one must familiarize themselves with in order to begin turbulence-free navigation towards profitability.
1) HSBC Is the custodian of the Gold market
2) JP Morgan Chase & Goldman Sachs are the custodian of the Silver market
3) The LME (London Metal Exchange) is the clearing house for futures and option contracts on base and other metals with cash value volume of $112 Million lots (2009)
It is these four entities that essentially influence the world precious metal market pricing of gold-silver-platinum and palladium.
There is also the precious metals spot market where traders and buyers determine when to buy and sell based on hourly and daily price points which change every minute of the day, this process serves as a value indicator.
From the LME options and future contracts include such instruments as SLV and GLD ETFs (Exchange traded funds) of silver and gold options and futures, which allows for the purchasing of contract bets that prices will either increase or decrease of the precious metals earning a profit or a loss for the purchaser of these agreements.
In my opinion this commodity group is less turbulent than the overall stock market in that it is a unique market with greater volume only second to the forex market and is much less riskier.
But let’s not stop there, if we could only begin to look at precious metals through a different lens, we could then see that this industry is in actuality the prime source of real money that is universally accepted unlike currencies or the vast array of commodities, gold is the ultimate fulcrum of wealth generation which qualifies itself as being the most liquid asset in four essential areas
4) Universal Versatility
Why are these indicators important?
1) 200 oz of gold can be in any form which can be carried anywhere in the world
2) 200 oz of gold can be quickly converted into any currency in less than one hour unlike large amounts of currency restrictions when traveling
3) There is nothing anywhere in the world that cannot be purchased with gold directly or indirectly
These primary indicators are important in other ways as well particularly when we consider that this commodity group is accessible
to everyone, and, when properly used can free most people up economically and financially from the smallest to the largest debts one may have generated throughout their lives.
Example: in gold enterprising one can generate through strategic contacts two ounces of 22 to 24 karat gold commodities daily…and begin the process of debt elimination and wealth building especially in a downward economic environment.
Even when we go back to the history of the wealth barons of yesterday and today we will find that precious metals played a key role in their wealth creation, this is a clear indication of how gold and other precious metals are more important to wealth creation than many are willing to admit publicly.
But the most telling truth of it all is that anyone can become a precious metal entrepreneur with literally little effort especially with all of the communication tools available to us such as social media, blogs and more.
This is the reality today and most people will never see it, but the wealthy has always known it.
Drake Funes is a precious Metals Entrepreneur operating in three countries, and is the director of Apex Strategic Resources Co.
Article Source: http://EzineArticles.com/expert/Drake_Fune/628565