Sunshine Profits

Japan is definitely the talk of interest in capital markets. The economic fallout in the recent days did not lag much behind nature’s destructive forces. The financial aftershocks gathered force as investors fled from assets deemed risky such as stocks, oil and gold (the latter is quite surprising).

It’s been only a few days since we’ve posted our latest timing-related essay on gold and silver prices, and since that time the situation has changed dramatically. Before providing you with the main point of this essay, we would like to comment on one of the questions that we’ve received recently.

Recent developments in precious metals space raise series of questions in terms of sustainability of yellow and white metal moves in the foreseeable future. In order to gauge near-term precious metal moves, investors track precious metals’ relationship between currency fluctuations, stock market influence and crude oil prices.

Middle East is still the talk of interest in the commodity markets and the markets have been experiencing substantial volatility over the past weeks.

Mounting social and political unrest in the Middle East boosted appeal for commodities as a safe investment option in recent weeks.

High volatility seen in commodities market in the past week attributes toward ongoing social and economical developments in the Middle East.

Irrespective of the concerns over financial tightening, talks of a gold bubble and economical weakness, gold marked its tenth straight annual gain in 2010.

As per the World Gold Council, precious metals demand will stay high this year with growing Indian and Chinese appetite for the yellow metal, but fresh buying in developed markets of jewelry will depend on economic outlook.

Inflation vs. market fluctuations is always a hot topic in precious metal markets. Inflation is good for gold, which has a long history of acting as a hedge against it.

Political as well as economical developments around the globe, especially in the Middle East, have affected the commodity markets during the previous week.

Political and social unrest in the Middle East was the most discussed topic during the week. Restlessness and riots could inflate food prices in the region and worsen the economic balance further.

While a majority of investors, analysts and experts dwelt on gold and (to a lesser extent silver) in 2010, sister precious metals platinum and palladium notched up significant gains matching gains in the investment safe havens