How Will the US debt rating downgrade affect gold and silver prices?. The United States debt rating downgrade has had a strong effect on the price of gold and silver prices. The United States debt and bond rating outlook has been down graded to by Standard and Poors. The U.S bond rating downgrade has added strong volatility to the commodity markets, and it has also added a bullish tendency to gold and silver prices.
Will the US debt rating downgrade affect gold and silver prices? In the short term we can expect an increase from the S&P rating negative outlook to help and gold and silver prices. This is because as people move out of United States debt, they will increasingly buy gold and silver.
However as gold and silver prices continue to go higher and higher in 2011, then American debt becomes more attractive just on a cost basis. At some point, investors must deal with the fact that there is only a finite supply of gold, and if ownership of all gold reserves should become heavily owned, then investors will have no choice but to reinvest in United States debt. It is important to note that the United States debt rating downgrade can affect the global economy, because many countries back their currency with United States dollars . Hopefully these scenarios answer How will U.S. debt rating downgrade affect gold and silver prices for investors.