Both silver and gold had a good run in 2007, the precious metal industry refuse to budge lower and as the US dollar index stepped back, the window of opportunity opened up for a spectacular bull run that saw the precious metal industry come alive like never before. Speculators did not wait around to find out how much the dollar would be worth as they headed for the golden hill with silver punters tagging close behind. The genesis of the financial crisis had already begun brewing that most average citizens were totally unaware of. As banks were cleverly bundling subprime loans and selling them off to offshore banks, they were not clever enough to avoid the repercussions that were to follow.
Meanwhile, the demand for gold was ‘business as usual’ with gold predominantly being channelled into the jewellery industry and Asian gold demand was unwavering especially from India and china as their booming economies allowed these two giant economies to hoard up on gold in the form of jewellery.
In essence, the economy of the world seem to be moving healthily along and the growth of the capital market was so attractive that, little attention was paid to the precious metal industry by investors in terms of investments. The first indication of any future economic turmoil came about when the prices of gold increased gradually each month at the start of January from 631.17 dollars per ounce to 664.75 dollars per ounce in February, a slight dip occurred in March with prices falling to 655 dollars per ounce only to bounce back again in April to almost 680 dollars per ounce, an almost 50 dollar an ounce increase within the first quarter of 2007.
By November 2007, gold prices had already passed the 800 dollars an ounce mark before finally settling at 803.20 dollars an ounce in December 2007.