Will The Certified Gold Market Continue To Be Steady? Posted by James Randolph on June 14, 2010
Will The Certified Gold Market Continue To Be Steady?
June 14, 2010 – As gold prices dropped one percent this week with investors switching funds from gold to stocks, the rock-solid certified gold market has turned a little shaky. For the third day in a row, the euro stealthily increased in value even as industrial commodities gained. At the same time, the Dow Jones index moved up.
Jeff Pritchard, from Altavest, a California broker-dealer, expressed that the standard trend is for people to turn to the stock market when they are risk averse. However, gold seems to be in greater demand when the market is uncertain, he said. The first quarter of the year 2010 saw gold advancing ahead of the equity markets and other investments that were perceived as risky. But post mid-March, the rise of gold prices can be attributed solely to the euro’s decline and the fear of a worsening recession.
On Wednesday last week, the certified gold market saw spot gold dipping from its all-time high to $1,214.65 as U.S. gold futures for August went down $7.70 to $1222.20. Clearly, gold is under a little pressure as the euro advanced $1.21. European Central Bank President Jean-Claude Trichet remarked that he expected the European economy to bounce back slowly.
However, inflation rates in major economies around the world, including India and Brazil, are rising, leading advisers to recommend gold as a hedge. Adrian Day, of Adrian Day’s Global Analyst, when asked about a possible softening of the certified gold market, said, “I always like to focus on the big trend, and the big trend for gold is up. … I definitely think gold is going up by the end of the year.” He goes on to explain that the main reasons people have been buying gold are all still in place, and that the added uncertainty about sovereign markets will only fuel investments in gold.
Senior Staff Writer – Certified Gold Exchange