The Gold Market and Economic Reports Posted by James Randolph on March 30, 2012
As the gold market continues to recover ground from a correction that began just over a month ago, we are learning more about the developing economic news from within the United States. Recently, several reports have surfaced that indicated a reasonable to fair stabilization of the economy. These reports, including the jobs report and the housing report, did not necessarily indicate growth in the US economy. However, they did indicate more stabilization than we have seen since 2008.
Markets have been ebullient on this news since that time. Financial stocks were recently at eight-month highs. However, the reality of the situation is beginning to come home to roost. The jobs numbers from February are adjusted for a number of workers including those who are no longer looking for work and those who are underemployed rather than unemployed. The housing market proved a negative gain in February, beating the original expectation that it would find traction in time for possible gain in spring and summer.
The gold market has been regaining ground since the original reports hit the news wires. It has not yet breached the $1,700 level again, which makes the current levels between $1,600 and $1,700 a very good buy point. Investors with an eye to the long term have been looking for just a correction in gold as we are seeing now to increase their positions.
Of course it is possible that the gold price will fall a little before it begins another parabolic rise. If that is the case, it should still be regarded as a buying opportunity. Due to the scarcity involved in the commodities market, we can accurately forecast the growth of gold. If the economy does improve, then gold prices will rise out of scarcity. If the economy falters yet again, gold will rise as the only valuable asset in an otherwise flawed market.
The fundamental stability, safety, and worth of gold are extremely valuable in today’s market and these specifically are the reasons why. The economic reports that have surfaced in the past two to four weeks are nominal notions of stability at best and sooner rather than later the relative strength of the gold market will again come to the forefront in the minds of investors.
Senior Staff Writer – Certified Gold Exchange