The overall sentiment in the financial industry is that both gold and silver will keep gaining value in the near future. Regardless of whether a second coronavirus crisis hits or not, the interest in these precious metals is still growing on a global scale.
Is the Coronavirus Pandemic Fear Warranted?
Last week, scientists and experts seemed to indicate that a second round of coronavirus infections was rather likely to occur in the coming weeks and months. Given all of the scientific evidence out there today, that would not necessarily be impossible either.
Regions that have eased up on restrictions, such as France, China, and South Korea, have already been forced to revert some changes due to new coronavirus cases. Where these new cases originate from exactly, is unclear. There is still no real international travel, and most restaurants around the globe remain inaccessible for everyone.
At the same time, the global fears regarding the coronavirus pandemic appear to be subsiding once again. More specifically, that appears to be the overall sentiment in the financial industry as of right now. Whether that cautious optimism is warranted, is a different matter. It is far too early to draw any real conclusions.
One thing that is certain is how the pandemic has been beneficial to precious metal markets. Gold’s price has bounced back strongly after dropping to the low $1,260 range not that long ago. Such a low price creates an excellent opportunity to acquire gold or silver at a very low value, especially given the long-term profit potential these metals provide.
A similar sentiment is in place as far as silver is concerned. It too had a rocky first quarter of 2020, with no real excitement taking place in April or the first half of May either. That situation has now come to change, as the silver price has broken the $17 resistance once again. If the momentum continues for both of these assets, the coming weeks and months may prove rather lucrative in many different ways.
Where Will the Markets Go From Here?
It is always difficult to predict what the future will hold for the gold and silver markets. It would appear that, based on the gold futures trading, the price will keep moving up rather nicely.
A push to $1,800 may be a bit too optimistic, but overall, the uptrend will remain in place for the coming few weeks. A second wave of coronavirus cases would spark interest in precious metals, yet a lack of such a new “wave’ may very well have the exact same effect.
Silver futures are also in a very good place as of right now. On Comex, the prices for July sit near $17,39, which is on par with their current value today. Similar to gold, silver has successfully overcome the losses sustained earlier in the year, and shows room for upward momentum.
There is also the aspect of how neither gold nor silver can be arbitrarily printed by the central banks around the world. While those institutions can inject liquidity into an economy by printing money, precious metals successfully circumvent those issues altogether.
With no active involvement by central banks, gold and silver will remain safe from quantitative easing. That alone makes them both valuable and scarce, two traits that will become more attractive as time progresses.