Precious Metal Prices Fall to end January

Precious metal prices fell this week, meaning that both gold and silver ended January with their second consecutive monthly decline. Analysts believe that the falling metal prices are influenced by a stronger dollar, which climbed nearly two percent against other world currencies for January. Not only did precious metals fall prey to the newfound strength of the dollar; crude oil and stocks also tumbled, ending the month down as well.

For the month, gold fell approximately 2.3%, with silver dropping 4.1% and platinum down as well at 3.1%. This sudden jump in the dollar is generally believed to be the result of concerns over currencies in countries like Greece, Portugal, Spain and Great Britain, where the monetary systems are struggling even more than the US dollar.

While these losses by precious metals are noteworthy, many economists consider them to be short term. The economic conditions in the US are still dismal and any progress created with the governmental bailouts and stimulus packages falters as the plans end. In addition, the government has added billions in new money to general circulation and trillions to the national debt; the impact of these decisions will soon be felt and will make their presence known for years to come.

While the economic news is troubling, the outlook for precious metal investors is good. As the value of the US dollar corrects, many believe that a new run on precious metal prices will follow. Investors who are liquid should follow the trends and look to increase positions in bullion and rare coins before any increases come.

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Danny Burns

Senior Staff Writer - Precious-Metal.org