Gold is retreating yet again today after the latest economic data in the United States is showing that consumer confidence has risen to a nine-month high, thus strengthening the Dollar Index and lowering the demand from investors looking to purchase gold bullion and other popular safe haven products. Gold is currently headed towards a 5% monthly loss after rallying more than 10% last month, the biggest gain in six months. Despite the latest short-term dollar fluctuation, several market analysts are predicting that more investors may purchase gold bullion within the next few months as the United States Dollar begins to show signs of weakness as a result of inflationary pressures that are slowly but surely growing in our economy. Historically, wise American investors purchase gold bullion as a hedge from floundering dollar-backed assets, and with the fiat currency currently facing speculation about long-term inflation, we could see safe haven demand climbing in the near future.
By around 12:50 PM Eastern Standard Time, it appears that investing markets continue showing weakness in the short term as major stock indexes tumble along with the gold spot price that currently sits at $929 per ounce, decreasing $8.30 or .89% for the day, yet still increasing $4.10 or .44% in the last year. Summer projections continue to look bullish, with several market analysts holding strong to their previous forecasts of $950-$1200 per ounce before September. This being said, it is very important that we keep a very close eye on the spot price along with its current inverse correlation with the United States Dollar Index.
John Halloran
Senior Gold Specialist - Buy-Gold.org
