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Monday, October 6, 2008

Why Gold isn't Surging at this Time

While gold was the only commodity in the positive today, it hasn't performed quite as strongly as one would expect in the economic conditions we face. There are three reasons for this, with one being the major one to look to as a signal to buy.

The three reasons are a slowing demand for jewelery, speculators holding back, and most importantly, the dollar has remained too strong to cause gold to surge.

When the U.S. dollar starts to drop again, we'll see gold take a big step forward as it becomes the usual safe haven during difficult economic times.

I don't think there's much more to watch for in reference to gold investing at this time than the movement of the dollar.

Speculators and jewelery demand, while part of the picture, aren't the primary movers of gold, so we simply need to watch the performance of the dollar and respond accordingly.

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