Although at some point these traders do influence one another driving markets one way or another as insider trading and information flows through the investment platforms and markets are diverted with rumors. These rumors that turn markets bullish or bearish however have insignificant effects on the precious metal industries due to the resistance levels of the precious metal markets that are solid and regardless of how strong market pressures push these markets the resistance limits are always solid enough to push the market back towards neutral ground.
This is one of the sole reasons that investors view buying gold or silver as the best option for their investments in the long run. Those who do decide to cash in gold when these markets rally are the smaller ‘short run investors’ who speculate and cause the markets to stir, however ‘short run’ investors are cautious about approaching or trying to stir the precious metal market due to its resilience and besides ‘small’ fluctuations, these markets rarely yield to any form of market manipulation.
Gold prices have remained in steady calm throughout its 5000 year old association with humans as money or trading entity. The fact that the same amount of things can be purchased with an ounce of gold today as an ounce of gold could purchase more than a 100 years ago – this is often referred to as purchasing power, in the same context or relatively what people purchased for a dollar a hundred years ago cannot be purchased today.
What people do not realize is the fact that, it is not gold that has increased in prices; it is money that has been losing its value over time. The reason behind this is that money can be printed, whereas the supply of gold is finite and it cannot be created at the whims and fancies of governments, thus gold and silver are known to retain their purchasing power – ‘come what may’.
Although most commodities are bought and sold under speculative conceptions, it is rare for these speculations to have drastic effects on the precious metal industry unless something truly outstanding transpires – usually sending the prices of precious metal up, instead of down only because people consider gold to be a safe haven to retain their future purchasing powers.