Gold Off & Running Again This Morning
April 10, 2008
Gold Investors on the Move Again
Spot gold is again on the rise this morning, after a good day yesterday. At time of this posting, spot gold has been driven up to about $935 on an extremely weak dollar and rising crude oil.
The dollar is at a record low against the euro, while crude oil is at about $112 a barrel. A decline in U.S. crude oil stock piles has raised concerns over supply, resulting in a flurry of buying activity and higher prices. That see-saw I mentioned yesterday is definitely in favor of gold investment this morning!
Todays caviat however, is the pending announcement from the Bank of England and the European Central Bank on interest rates. These decisions will effect currency rates, which will in turn have an effect on precious metals investment. Watch for their announcements later today and observe their effects on overnite trading and into tomorrow morning.
Additionally I am starting to notice more little talk on the Internet about an overplaying of the commodities market by investors. There is reasonably based concern that speculation has pushed prices beyond the ability of an actual usage market to support, particularly in the case of precious metals. We have already observed some larger swings in gold bullion values over the past three months and this is the sign of an overplayed market. I don't mean to imply that there is a big crash coming for precious metals, not while the dollar continues to decline, just that you may see some frightening hills and valleys over the next six to eight months.
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