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August 11, 2008

Selling metals

There have been several stories in the news about people selling metals; not only gold and silver but also products made of steel, copper and aluminum. Is this just a matter of folks needing money, or is there more to the story? Listen

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"Well, I think certainly part of it is the fact that people do need money. People are not seeing their incomes going up with the rate of inflation, so they're looking anywhere where they can get some extra cash. But I think there's another element at work here, and that is that if you look at the last couple of years in terms of what's been going up in price, metals have been going up in price dramatically. Now this is because of the worldwide economic boom, especially in developing countries. So the metals, for example, that we mentioned - many of them are used in construction - they have been enjoying big price increases. Now, some analysts say that we may have seen a peak in these metals prices, at least soon. And so we may see metals prices actually fall in the next six months to a year. So it may be that what some people are doing is just practicing good investment advice. They're trying to sell their metals at a high point; selling high, they bought low, and therefore, they're making a big profit."

Posted by Dave at August 11, 2008 08:00 AM