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Gold and Silver

Asked Mar 14, 2010, 03:39 AM — 1 Answer
I saw on CNBC that gold and silver can go up in deflation times. I learned in school that gold and silver go up doing inflation when the dollar sinks. The experts on CNBC do not always explain themselfs.Thanks in advance for the help.

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cdad Posts: 10,958, Reputation: 6540
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Mar 14, 2010, 07:44 AM
What is going on is that those metals are a resource based metal. And gold has a universal value along with silver. Both are used in industrial as well as ornamental applications. When the value of the dollar goes down the gold can go up because it can hedge the value ( universal ). When the dollar goes up it keeps pace because of its inhierent value. But if the supply goes up ( not many buyers and more sellers ) then the price can adjust causing either metal to crash.
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