The latest in gold news reports that gold is up again today mostly due to a weaker dollar and value buying and is up around $15 for the day. Poor news came out of housing and durable-goods which took a toll on commodities, including oil. Many investors went to gold as a "safe haven" investment.
February 28, 2012
Gold (NYSE:GLD) is up today after prices took a three session breather. The commodity us up mostly due to a weaker dollar and value buying. Gold is up around $15 so far on the day, as it continues to modestly rise. A stronger euro was able to help the dollar-dominated gold gain in value as it is cheaper for people with other currencies to hold the commodity.
The euro is up against the dollar today as the ECB prepares tomorrow to announce its decision on a refinancing program to further ease Greece’s debt issues as well as making it easier for other debt stricken European countries to get aid for their economies.
Poor news out of housing and durable-goods in the US took a toll on commodities including oil, which has been rising higher lately.
Since gold was down the past few sessions, value investors saw a favorable moment to get back into gold for its safety properties. Gold is considered a hedge against uncertainties in the marketplace and in the world. As you can imagine gold demand grew considerably last year with the European debt crisis making investors uneasy. Also, the US’s debt ceiling issue also gave investors the need to protect themselves.
The world recovery is overall showing signs of improvement which is very encouraging. However, it is still in a delicate state and could easily reverse if governments ignore the issues. Rising oil prices also can derail a recovery if they are here for an extended period and continuously at high prices. The issues in Europe and Iran have caused oil prices to march higher over the course of the month to near 2008 highs. Unfortunately, there is not much we can do other than tap our oil reserves.
The good news is that in the optimistic consumer confidence today we saw that consumers are so far shrugging off the increases in gas prices. However, it is yet to be seen how long this oil rally will last and if the effect on consumers will be damaging or not. Remember, consumer spending makes up 65% of US GDP. If high oil prices can take the consumer out then it takes the economy out.
Gold is a great hedge against these uncertainties and you can expect to see demand rise over the short term. The world recovery does not appear to be greatly affected by the rise in oil prices at this time but that can change very quickly. Grab some gold to shield you from the uncertainty.
To see original article CLICK HERE