Gold Market Upward Trend Posted by James Randolph on May 31, 2010
May 31, 2010 – The gold market continued an upward trend at the end of last week, finishing Friday at $1215 per troy ounce on the Comex division of the New York Mercantile Exchange, in time for the three-day Memorial Day weekend. This increase reflected news of the downgrade in Spain´s credit rating on Friday by Fitch ratings, from AAA to AA+, the latest development in the ongoing sovereign debt crisis throughout the euro-zone.
In all, the gold market rose 3% in May, though it remains $28.10 (2.26%) below its all-time record high registered earlier in the month, and $11.10 (0.9%) off its first-quarter high of $1226.10. The rise in gold bucks an otherwise downward trend for other metals.
That the gold market received a boost from the gloomy news out of Spain reflects the prevailing wisdom regarding the metal: that it is an especially trustworthy safe-haven asset and hedge against inflation during periods of market turmoil and systemic economic crisis. This has also fueled the recent rush in Germany toward buying krugerrands, the most popular form of gold coin, in the wake of the massive euro-zone bailout and the inflationary possibilities many investors fear.
Even skeptics of the long-term viability of gold as an investment believe that the market will continue to rise significantly in coming years. Both Brett Arends in the Wall Street Journal and James Mackintosh of the Financial Times noted in recent columns that the “gold rush” may be far from over, and that the recent rally in the gold market could continue for years to come.
Senior Staff Writer – Certified Gold Exchange