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Tuesday, October 21, 2008

Gold Futures Continue to Tumble on Stronger U.S. Dollar

For the eighth time in nine sessions, gold futures fell as the U.S. dollar continues to be one of the major safety choices of investors. The yen is the other choice for regular investors seeking safety.

Gold for December delivery dropped by 2.8 percent or $22 to end the session at $768 an ounce on the Comex division of the NYMEX.

Forced liquidation continues to pummel gold, along with most commodities, as funds seek liquidity.

Gold will eventually recover because of the financing of the bailout by the government of the U.S economy. Once that starts to kick in, we should see a significant weakening of the dollar, increased inflation, and gold starting to rise again. It's only a matter of when, not if.

For now though, lack of liquidity is forcing funds especially to sell gold positions. That's driving down the price of gold for now, while the dollar continues to strengthen.

1 comment:

Free Music said...

thanks for the heads up