Freeport-McMoRan (NYSE:FCX) Retreats As Gold Continues Juggling Act

Freeport-McMoRan (NYSE:FCX) is down about $2 a share, a $2.80 percent drop at 4:12 P.M. EST today, as gold prices made some huge swings throughout the day as the market continues to digest the threat emerging from the announced bailout of the socialist, welfare countries in Europe.

The euro plunged in response to ongoing EU debt crisis, as growing concern over whether or not the euro or the European Union can survive the crisis is growing.

Gold almost broke through the $1,250 an ounce barrier early in the trading session, fell back, then rebounded again and fell back again, showing the uncertainty among gold traders and investors on how to respond to all this.

Gold mining companies like Freeport-McMoRan will move in unison with these factors which are affecting gold futures prices, and will continue to do so for some time.

Even so, there is support under gold, and even though there is a lot of emotion in the gold market now, which will always cause huge fluctuations in the price, there are fundamentals in place which will continue to offer support to gold for a long time to come.

From the standpoint of gold, the EU debt crisis could extend the gold bull market even further into the future, depending on how the moves toward austerity measures pan out.

That, more than anything, will determine much of what happens in that region, as riots and protests are beginning to spread and it remains to be seen if political leadership there has the will to take the steps needed to save the economically dying region.

I don't feel sorry for these nations, as the people received the handouts as the government fed them to them. They haven't been able to afford them for some time, and now they are being exposed for the socialist and welfare states they've been for a long time, and Keynesianism is revealed to be a failed theory whose time should be over; meaning government spending and central banks printing money can't create wealth or build capital.

All of this is good for gold investors in the long term, as there is decreasing faith in paper currencies of any type, and even when the U.S. dollar is considered a safe haven, it's not because it's strong or unique, it's just not as bad as the other currencies.

The Canadian dollar actually has a good chance of being one of the stronger currencies in the world, but that will demand that Canada continues on doing some of the good things they've been doing, and don't go down the route Europe and increasingly the U.S. is going.