Gold Pulled in 2 Directions to Start Week Posted by Brian Ford on August 26, 2014
The Standard & Poor’s 500 Index surpassed 2,000 this morning for the first time in history, limiting gold as the yellow metal also struggled against a bevy of other factors. By 10am CST the gold spot price had fallen $3.70, although some analysts have stated that gold could lose more value in the near-term, depending on how a few key factors play out.
“The S&P going to 2,000 for the first time in history could be an anomaly caused by government infusion of dollars into U.S. stock indices, but even if there is nothing organic about the S&P hitting this milestone it is sure to draw some attention away from the gold market,” said CGE analyst Roger Bidwell.
Additionally, the U.S. dollar index grew somewhat, thus forcing the price of gold downward despite the fact that the U.S. Mint and many other gold dealers have reported an uptick in buying over the last two weeks. “If you eliminate the dollar’s surge then gold is up by about $4.40 in the last week, but the USDI’s growth has forced gold into $1,270 per ounce territory,” Bidwell commented.
Not all news was negative for gold today. The U.S. Commerce Department said today that new home sales in July fell a whopping 2.4%, and some analysts believe this could be the beginning of the end for a second U.S. real estate bubble. Falling real estate values have historically been bullish for gold prices as the real estate and gold markets operate on two separate ends of the interest rate spectrum.
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