The New Year is already showing a very promising gold market as prices popped in trading this week.
Posted by Adam King on January 04, 2012
Gold Market Pops with New Year
January 4, 2012 – The New Year is already showing a very promising gold market as prices popped in trading this week. The price of gold was up $40 an ounce on Tuesday and $20 in intraday trading on Wednesday, placing the spot comfortably over $1,600 an ounce. This 2.5 percent increase is a very significant shift in daily trading and the price will most likely begin to level. Here is the proof in the pudding that all the doomsayers who dared speak against the gold market, or sell their positions, were wrong. Gold is still in a long-term bull market and is now showing it.
The fundamentals of the gold market never changed—gold was up 10.19 percent on the year before yesterday’s surge in the markets and gold is the best performing asset of 2011. However, following the correction of December, several pundits, economists, and analysts went out on TV or tweeted that the price of gold had finally reached its peak. We have our favorites among the pack and it would be nice to hear their thoughts now, but the good news is that the fundamental stability of the gold market is still very much intact. Following yesterday’s market action investors around will undoubtedly recognize that and we can get on with the bull market.
While a further correction to the downside in gold is always possible and prudence requires I say so, the gains that could have been made on the advice to buy thus far would make nearly any investment worthwhile. Gold is poised to be the investment of 2012, as it was the best performing investment of 2011, and this gold market may best be handled by jumping on board now.
Note that the European problem continues to worsen in the wings as we are learning through main stream media that there is in actuality a great deal more debt than previously thought and American institutions, such as the failed bank MF Global, are exposed to that debt in a direct and dangerous manner. A Princeton University economist, Hyun Song Shin, has warned that, “European banks have played a much bigger role in the U.S. economy than has been generally thought—and could a lot more damage than expected as they pull back.”
In addition to the gains that will be made, the promise of a safe haven will be bringing more and more investors to gold in the coming year. If any further crisis should befall Europe, such as the failure of a major European institution, it would directly influence the gold market as panic buying forced the price of gold up even more than yesterday’s gain of $40 an ounce. The gold market goes up, either way.
Stewart Lawson
Senior Staff Writer – Certified Gold Exchange
Categories:
US Gold Market
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