Gold Prices Plummet As Silver Drops From Eight-Year Highs

Gold price
Gold price

Gold prices along with its sister metal, silver’s prices are seeing a sharp fall after they were rallied up their peaks in a short squeeze recently.

Silver prices rallied Monday to their highest intraday level since 2013, following a buying frenzy started by the Redditors also responsible for the GameStop stock situation. The precious metal prices were also subject to a deliberate buy-and-hold hype by the individual retail investor group who are vigorously working against the institutional investors and the hedge funds since the last few weeks.

This move has been equated by several equities’ research analysts as resembling the early 1980s, when the Hunt brothers famously tried to corner the silver market and prices of the metal rose from $11 an ounce in 1979 to as high as $49.45 in 1980.

Gold Prices Drop After Silver Drops By 2% This Tuesday

Gold prices are also affected as investors are now worried about the future of this precious metal following the drop suffered by Silver. Silver during March delivery was trading at $1.96, or 6.7%, lower to $27.45 an ounce. This jumped to $30.35 on Monday, February 1st, marking the highest settlement for silver since February 2013. However, the price of Silver dropped more than 2% on Tuesday, February 2nd, marking a slump down from the eight-year record high.

Analysts note that Gold prices were also trading higher than usual as Silver prices skyrocketed to 8 to 10% high. This led them to believe that when silver begins its downtrend, gold prices will also be affected as was witnessed early February 2nd.

Further reports issued by market analysts mention that the future of silver and gold prices will be affected by a number of factors. These include the ongoing coronavirus pandemic, the stimulus checks issued by the government, the roll-out of vaccines and the ups and downs of the US Dollar.