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Gold Price Goes Up as Economic Conditions Worsen

Jun 042012

For most investors latest gold price is one of the most anticipated and most awaited news of the day. As gold price shows a now so good performance in the past few days, some investors view this as a negative sign for gold and thus lose attraction for gold. But today gold has proven that despite trending along risky assets it is capable of reversing the trend.
Gold Price Goes Up as Economic Conditions Worsen helps rekindles investor’s attraction to gold. Plus with a higher rate of unemployment, everybody is now expecting another boost in the paper currency in the form of quantitative erasing.
Here is a portion of Dow Jones article to give us authority’s interpretation about the current economic condition, in relation with precious metal’s future.

Gold Price Goes Up as Economic Conditions Worsen

Gold prices have roared to a three-week high on speculation of fresh monetary stimulus triggered by a disappointing US monthly employment reading.
The most actively traded contract, for August delivery, rose $US57.90, or 3.7 per cent, to settle at $US1622.10 a troy ounce on the Comex division of the New York Mercantile Exchange.
June-delivery gold, the front-month contract, settled up $US57.90, or 3.7 per cent, at $US1620.50 a troy ounce.
The unemployment rate, obtained by a separate survey of US households, rose to 8.2 per cent in May from 8.1 per cent in April, the first increase in nearly a year.
Gold bugs celebrated the sour jobs data, catapulting prices up nearly $US60 at one point and helping gold end at a three-week high.
“People feel that after this number, more money printing is coming,” said Matt Zeman, head of trading at Kingsview Financial.
Employment is a key consideration for monetary policy decisions at the Federal Reserve, and many gold-market participants have been hoping that weakness in the labour market would usher in another round of stimulus measures from the bank.
Gold prices have rallied on past accommodation efforts. Investors tend to flock to gold on fears that excess liquidity would erode the value of the US dollar and spark inflation. Gold is widely considered a hedge against inflation and a store of value.
“While inflation is not now apparent, stimulus that may result from this turmoil is not far away,” said George Gero, vice president at RBC Capital Global Futures.
Gold’s rally intensified in the final half-hour of trade, with futures setting fresh records as investors streamed into the market.
Gold’s gains were amplified by investors who had bet on lower prices, or shorted gold, who were forced to return to the market as buyers in order to reverse those positions.
If you want to read more of Dow Jones‘s article, click here.

As unemployment increases investor’s fear for their asset’s safety, gold still remains as the best hedge against inflation and the best safe haven investment.
Gold Price Goes Up as Economic Conditions Worsen is just a clear indication that gold and other precious metal investments is still the best hedge against worsening economic conditions. Though there may be some who seems convincing about their prediction that gold is in a bubble, and that sooner or later it will explode and leave investors bankrupt, but practicality as base from current events their assumptions are pure hearsay without solid foundation.

Gold Price Made a Remarkable Increase

Gold Price No Responses »

Jun 012012

As the month ends Gold Price Made a Remarkable Increase in gold price which gives hope to many investors and gold trade authorities. Plus the current economic circumstances seems very favorable for the next round of gold price increase.
This contradicts other presumption that gold price is trending a spiral down ward trend, and that it is one of the signs of a gold bubble that is about to explode. Indeed gold proves that this allegations are wrong, that gold is capable to compete in the market and that it is still a safe haven investment.
Here is the current performance of gold in the market.

Gold Price Made a Remarkable Increase
The GOLD PRICE range today stretched from $1,546.08 to $1,629.30. It closed at $1,629.30, worth $57.90 more than when it went to bed last night. That leaves a beautiful, strong, enchanting chart behind, a bottom with a mighty surge through the downtrend line from the March high at $1,792.70 and just beneath the $1,625.36 fifty day moving average.
Much more encouraging is the way gold sliced through $1,580 and $1,600 resistance and leapt to the next ($1,625) level. Folks, this is powerful movement. Gold cannot send you a louder message that it has left its low behind it and begun the next rally. NOW is the time to buy — now. Silver shot like a meteor over at 148c range today, from 2720.7 to 2869 cents. Closed near the top of the range at 2849.7c. Once silver gapped up at 2775c, in 3-1/2 hours it reached 2869c, a straight-line rise on the chart.
Meanwhile the Euro-zone continues to crumble. Right on time about the end of year’s first half (as expected) bad unemployment news turned up to rack an already panicked stock market which had been floating on fumes, hopes, & Fed propaganda. New jobs in May grew by 69,000, lowest in year and far short of the 158,000 economists expected.
That took unemployment up for the first time in 11 months, to 8.2%. Adding woe to pain, the government revised March & April estimates down as well.
Meanwhile overseas the Euro zone is forcing another austerity treaty on the weaker members. Too little, too late. Bad unemployment data in the face of an upcoming election will send the Fed skittering to the money pumps to keep the ship from sinking.
What y’all must not miss here is that stocks & metals parted ways, decoupled, disconnected, & diverged. Markets are screaming that they now expect more inflation, by the trainload.
BEHOLD, again markets teach us a lesson: Wait. Be patient. What the chart implies the chart will fulfill, although it be delayed by time, chance, & government manipulation. The doom hanging over stocks has Ben Bernanke sweating bullets or nickels or whatever he sweats, & will panic him at last into more inflation. He knows no other, and can do no other.
For more of this article by Franklin Sanders click of here.

Though gold shows a very volatile price this past few days and gives investors a hard time, nevertheless it also shows that it is still capable of turning the tables and make things favorable for itself. As unemployment, further inflation, and a coming election investors and authorities are predicting another round of quantitative easing from the Fed.
Things seems favorable as Gold Price Made a Remarkable Increase, and as economic tension grows investors will find ways to protect their assets from rising inflation, further making gold and other precious metals as a very attractive safe haven investment.

Gold Remains a Safe Asset

Currency, Gold News, Gold Price, Precious Metals No Responses »

Apr 202012

Aside from being a safe haven investment, gold has been considered by many investors as one of the safest means to manage the risks in their investment portfolios. That is because most of the time the stock market is moving directly the opposite direction of the gold. So if the stock market declines, certainly gold will move upward.

But recently this trend seems to break down, when stocks declines gold tend to fall too. This put a question whether gold is still a good choice to investment in gold.

So here is an article by Hao Li which explains why gold remains a safe asset.

Gold Remains a Safe Asset

While chances of a third round of U.S. quantitative easing measures have dimmed, the World Gold Council said Wednesday the yellow metal’s price outlook is positive due to its global appeal and value in hedging against both inflation and deflation.

In the first quarter of 2012, U.S. economic data improved and minutes from the latest Federal Reserve interest-rate-setting meeting indicated that officials were less supportive of monetary stimulus.

These developments were perceived as negative for gold because loose U.S. monetary policy, which pushes down the value of the dollar and other currencies that peg to it, is one of the biggest factors that drove up gold prices in recent years.

Still, gold managed to rise 8.6 percent in the first quarter of 2012 against the dollar because other factors supported prices, the London-based WGC said in its latest quarterly commentary.

Rising oil prices, for example, stoked inflation fears and pushed up the price of gold, a traditional hedge against the waning purchasing power of fiat currencies.

Gold is also a hedge against asset deflation, stated the WGC. The dual fears of inflation and deflation in the sovereign debt crisis-plagued euro zone, therefore, have been supportive of the yellow metal.

The WGC also pointed out that aside from the U.S. and its policies, emerging market countries like China and India are also big gold buyers.

Research from GMO LLC, a Boston-based asset management firm, shows that emerging markets were the biggest consumers of gold in the world from 2000 to 2010.

Developments in China and India in first quarter 2012, however, were arguably bearish for gold’s outlook, as China’s weak economic data and the Indian government’s announced import duties and jewelry tax hikes cast doubt on the strength of future demand from the two countries.

The WGC, nevertheless, concluded that gold “continued to exhibit a positive (upside) skew” in the first quarter of 2012.

Prices of gold fell 0.57 percent, or $9.40, to trade at $1,641.90 per ounce in afternoon trading on Wednesday in New York.

For more of this article, click here.

Despite the current situation in the market still gold remains a safe asset that one can rely on in times of economic uncertainty. It is still the best safe haven investment with the lowest investment risks in the market.

So for those who are still thinking whether or not they should invest in gold, authorities already confirmed that gold is a safe asset investment. So before gold price rise up again, make sure that you already placed your hard earned asset in an investment that is guaranteed by authorities that is safe from inflation and currency devaluation. Get a gold investment now.