Gold Exchange Prices Posted by James Randolph on February 24, 2010
February 24, 2010 – After rising for nearly a month, gold exchange prices fell again yesterday over concerns about the upcoming Congressional testimony by Federal Reserve Chairman Ben Bernanke and low Consumer Confidence Index numbers. Gold prices slipped $9.10 to $1,104 per ounce for April gold in trading that ranged from highs of $1,121.70 to lows of $1,099.60.
After a recent rise in an inconsequential discount rate, investors are concerned that the Fed is preparing to also raise key interest rates to stem mounting inflationary pressure. The excessive stimulus spending by the federal government and the near zero percent lending has forced too much money into the economy; a move that many believe could cause rampant inflation.
In addition to Bernanke’s impending testimony, the Consumer Confidence Index is also signaling a weaker faith by many Americans in the stability of the economy. The February index stood at 46, which represented a 10-month low. With the economy still not showing substantial gains, many people have grown skeptical of recovery prospects.
This news is giving gold a chance to regroup. "I think we are still in a consolidation period right now," says David Morgan, founder of Silver-Investor.com. "I would not get long this market until we’re in the $1,180 range or higher." Gold exchange prices have been moving up over the past month as technical indicators and analysts’ predictions suggest the metal is ready for another rally.
Prices may dip this week as the effects of the Bernanke testimony are felt, but a recovery in gold exchange prices is likely to follow. Gold has a reputation as a hedge against inflation, and the current economic environment suggests that inflation is indeed lurking, making gold a potentially strong investment now.
Senior Staff Writer – Certified Gold Exchange