Gold and Silver: The Future of Real Money

It appears that gold has finally hit the $600 mark, which it had been courting for a few days. $600 is a milestone that has not been seen in two decades, although if you take inflation into account $600 isn't nearly worth what it used to be. Still, $600 is a huge leap for gold, and it may hover near that amount for the time being.

Silver has surpassed my expectation and is surging to near $13. It isn't quite there yet, so there still may be a correction to bring it back down to around $12.50. However, with gold hitting $600 it's hard to say exactly what silver will do. I'm expecting silver to keep rising quickly, considering the recent trends, but I expected there to be a bit of a lull around twelve bucks and a half. I could be entirely wrong, though, so I'll keep a watch on the charts over the next few days and post if there are sudden jumps in price.

Both silver and gold are rising at an incredible rate. It's hard to say what is truly the factor, but I suspect previous mining strikes coupled with the Fed's decision to cease reporting the M3 money supply data as of March 23 of this year (thus making inflation harder to calculate as the amount of dollars in circulation is unknown) is causing the charge ahead - at least in dollar value. If inflation causes those dollars to depreciate in value, a higher spot price only reflects silver's and gold's ability to store value. Values tend to fluctuate based on supply and demand dynamics, but overall gold and silver manage to maintain a reasonably constant value in hard goods terms, if not in dollar ones. However, the uncertainty caused by the Fed's decision is more than likely driving speculation, and currently both gold and silver appear to be rising in dollar value far faster than inflation.