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Wednesday, February 27, 2013

Gold Futures Drop as Investors Take Profits

After a couple of days of gold futures surging, investors decided to take some profits off of the table, as gold for April delivery dropped $19.80, or 1.2 percent, to close at $1,595.70 an ounce on the Comex division of the New York Mercantile Exchange.

Some media outlets suggested it was positive macroeconomic data out of the U.S. and Europe that resulted in the downturn, but that's doubtful after Federal Reserve Chairman Ben Bernanke stated he has no intention of stopping stimulus measures, which of course confirms the extreme fragile global and American economy.

Another thing is any investor that believes in any way that Europe has anything positive economically to base an investing decision upon, is setting themselves up for failure, as Europe is and will continue to be an economic basket case no matter what positive spin the financial media attempt to put on it.

For example, some news reports said gold futures fell because Italian political parties are starting to work on the possibility of forming a government. So what? Italy is working on forming a government. That's meaningless. Italy is going to have a government no matter what the news reports say. So the idea is put forward that they are working on it is considered news and a reason for gold investors to sell. That would mean gold investors bought gold because there were concerns over whether or not Italy would form a government. It's irrelevant of course.

Britain also continues to be an economically challenged area, where its economy contracted by 0.3 percent from the last quarter.

The only positive economic news in the United States continues to be the housing sector, where pending home sales in January were up a little more than expected. Other than that, most of the economic news in America is dismal.

Durable goods orders were reported as having fallen in January, a nod towards extremely weak manufacturing sector. Durable goods orders in the U.S. plunged 5.2 percent last month, where economists were looking for a drop of about 4.0 percent.

As for currencies, the euro U.S. dollar rose to $1.3101. The dollar index, which measures the U.S. dollar against a basket of currencies, was also down on the day.

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