Gold and silver demonstrated during September one of the worst performance in recent years. After the sharp rally in gold during August as it nearly reached the $1,900 mark, gold tumbled down to below $1,600 mark, while silver also followed and fell below the $30 mark. What were the main factors that contributed to these large falls in September? These factors include the FOMC decision to purchase long term securities, the CME margin requirements hike on gold and silver contracts and the shift of traders during the second part of September away from traditional safe haven investments. Despite the sharp falls in precious metals’ prices, the high uncertainty in the financial markets is still high vis-à-vis the speculations around the U.S. Economy’s slowdown and the debt crisis in Greece. So what is next for gold and silver in October 2011? Let’s examine the metals market for September and provide an outlook for gold and silver for October 2011.
Lior Cohen, M.A. commodities analyst and blogger at Trading NRG.