Thursday, July 8, 2010

Euro Rally Pressures Gold Prices Again

Gold futures look like they'll fall for the third week in a row, as a rally in the euro has resulted in traders moving their money out of the yellow metal.

There has been a furious effort by officials in the European Union to prop up the euro, and it is working at this time, even though there is little to justify the optimism some are putting in the failing currency.

Just like his American counterpart, European Central Bank President Jean-Claude Trichet has announced the so-called economic recovery is gaining momentum, and this fantasy has been latched onto by the clueless who humorously believed his assertion.

Or at least, they knew others would believe it and put there money temporarily in the euro to take advantage of the temporary favor it is enjoying.

Some strategists and analysts have drooled over the assertion there is an economic recovery in Europe, and have announced the fear that had driven people to gold has been removed from the equation.

To believe the sovereign debt crisis in Europe is over, the American economy is recovering, and China isn't dealing with urban property challenges, is faith, not something based in reality.

Everything that drove investors to gold is still out there, and once that is again taken into consideration, gold prices will rise again.

1 comment:

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