Q:

Why are metal prices rising?

A:

Quick Answer

As they are safe-haven investments for many investors, precious metal commodities, such as gold and silver, often rise in value under uncertain political, environmental and economic conditions. Some factors that have contributed to rising prices of gold, silver and other commodities are uncertainty about the U.S. economy and military involvement in the Middle East.

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Full Answer

The U.S. economy has a large impact on the global price of silver and gold commodities, and the value of the dollar, the projected health of the U.S. economy, and U.S. industry performance and regulations can all affect the price of gold and silver. Any perceived weaknesses in these areas tend to drive up prices. Long-term economic slumps, such as depressions and recessions, have an especially large impact.

When President Obama announced the escalation of a U.S. military presence in Iraq in 2014, the price of gold rose to a two-month high with a 3.7 percent gain. The increase coincided with the decline of the U.S. dollar and a lack of increase in the Federal Reserve interest rate.

In October 2015, the price of gold increased by 2 percent and silver increased by 5.2 percent in reaction to disappointing unemployment numbers. Prior to this, investor confidence in the improving U.S. economy had kept gold prices low.

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