A few investors decided to buy gold bullion today, but gold's recent rally was subject to some profit-taking this morning. During the last two weeks, investors decided to buy gold bullion and certified gold coins in record numbers, which helped gold surge to new all-time highs for consecutive days. Two weeks ago the gold spot price was $1016, and we had a record price of $1033 per ounce. Today, the gold spot price is $1058.30 and the new record of $1071 was reached yesterday. Many US markets have fluctuated radically during the last two weeks, as evidence against our government's claims of economic recovery have snowballed into an avalanche of revealing economic data.
With the 2009 holiday shopping season on deck, the Labor Department stepped up to the plate today to log yet another strikeout. Last week, Americans filed 514,000 initial claims for unemployment benefits, leading many economists to believe that our national unemployment rate will be above 10% before 2010. Employers have slashed 7.2 million jobs since the beginning of 2008, and 6 million of these unemployed workers are still beneficiaries of our nation's unemployment insurance program. Our lawmakers have extended the number of weeks that jobless Americans are eligible for benefits, but critics of the plan say that 78 weeks of benefits per person will only serve to deter these beneficiaries from finding employment. If unemployment numbers rise, it may be a third consecutive blue Christmas for many of our nation's retailers.
Many companies have been forced to eliminate jobs in order to minimize losses, because blue-chip shareholders demand dividends. The majority of US shareholders have been pleased with their stocks during the last three months, but many have expressed anxiety that their portfolios may never again reach pre-2007 levels. Sure, relative to six months ago things are great, but compared to to two years ago things are still astronomically bad. The Dow Jones Industrial Average(DJIA) reached 10,000 yesterday for the first time in a year, but couldn't maintain that psychologically important number for very long. It seems like only yesterday that the DJIA broke the tape at 14,000, and Wall Street economists were calling for a never-ending bull session. Today's investors realize that they require proper diversification,and some of these investors buy gold bullion. Investors especially value gold bullion as a short-term hedge against inflation, and while there are other types of gold available, these investors appreciate the affordability and security of physical gold bars and coins.
Steven Martin
Senior Gold Specialist - Buy-Gold.org
