James McKee

Gold and Silver Surge



Posted: Monday, March 07, 2011

by James McKee
http://www.forex.tradingcharts.com

The fear of continued conflict in Libya alongside the possibility of it spreading to other countries has sparked a wave of fear in the investment world and many are seeking refuge in the gold and silver markets.  It is a well-known fact that gold and silver do not appreciate in value, however they do not lose value either so when a currency loses value it takes more of that currency to purchase gold or silver.  The rising cost of both of these precious metals signifies a fast dropping confidence in the US dollar that is bringing its value down exponentially.

The Libyan conflict has gone from some citizens seeking a regime change to an all out bloody revolution complete with military warfare and civilian casualties.  There have already been hundreds killed and the dead are mounting and Gaddafi continues to insist that he holds Libya and that he will not give up control under any circumstances.  This has lead the opposition to openly express their desire to keep up the fight by any means necessary.  This could mean civil war for Libya causing further damage to major currencies and driving up the cost of gold even further.

The value of gold signifies a drop in not only the value of a currency but also the value in that currency.  As gold becomes worth more in USD’s it drops in value on the forex market against other major currencies (most of the time).  This is not true of all countries however because some (such as Australia) enjoy a unique relationship with gold.  Much like those countries who are closer to the oil supply experience far less of a boost in cost since they do not have to pay nearly as much for it to be transported.  Pay close attention to the cost of gold in coming days as it will be a sign of things to come.
Author is a Forex trader and financial analyst residing in Denver, Colorado. To stay up to date on all the latest developments in the financial world and beyond be sure to check out the forex exchange rates regularly.
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