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Wednesday, July 7, 2010

Gold Prices Close Down Below $1,200 an Ounce

In somewhat of a past pattern, gold prices today have been moving downward, mostly on what is perceived as slowing demand in India.

Recent lower gold prices has began to create demand in physical ownership in gold rather than investing in the yellow metal.

Typically this part of the summer is considered a slow time for gold prices, and they usually will rebound later in the year.

I don't really think this is how it will play out this year, as they are too many variables, especially the terrible shape of the economies in the U.S. and Europe to think gold won't continue to be a safe haven factor throughout the summer months.

Nothing has changed there, and once this irrational optimism passes in equities, we'll see the underlying fundamentals return to the minds of investors, and gold resume its upward price movement.

This isn't to say there won't be temporary corrections, as we're experiencing now. But as soon as the latest negative economic news returns, investors will pour money back in gold again, and the prices will consequently rise with that.

1 comment:

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