Gold Prices Today Surge in Morning, Down in Afternoon

Gold traders bid up the price of gold today, reaching almost $1,250 before pulling back in the afternoon. At 1:30 P.M. EST, gold prices stood at $1,227.8.

This is attributed to the traders pulling out profits after driving the metal up in morning trading.

All of that is just part of normal activity, but doesn't have much to do with the support or underlying fundamentals of gold, which are primarily safety, inflation hedge and an alternative currency.

Paper currencies have lost a lot of trust from people, and when that happens, being fiat, there is nothing left to shore them up.

Macro-economic issues continue to be the European sovereign debt crisis and the decision to bail out the socialist, welfare countries, along with inflation challenges in China, both of which generate questions on demand for raw materials and other products, which have been putting tremendous pressure on the stock market, and will continue to do so.

All of that is good news for gold and some gold mining companies, who will ride upwards with the price of gold, although they will also partake in the inevitable corrections as well.