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Weekly Roundup

What a week its been for gold: Starting out strong on the news that a last-minute deal was finally reached to save the US economy from teetering over the fiscal cliff. Gold and other precious metals didn’t have much staying-power though.

After a chance to digest the reality of the fiscal cliff deal, posting gains on Wednesday, things took a turn for the worse yesterday as market watchers felt that the US Federal Reserve’s monetary policy wasn’t favourable to gold. This also coincided with a weakening of the US dollar, a rare occasion where both precious metals and the dollar dropped in value at the same time.

The general consensus seems to be that the economy is now out of the woods, and demand for gold as an investment is on the way down.

So the question to ask is; do you jump on the bandwagon and sell now, or hang on in the hopes of the much-touted $2000 an ounce gold that everyone was predicting not too long ago?

Growing fears of inflation could signal an upward trend for gold, but if you sold now, it would be into a market that is currently feeling some downward pressure while still historically quite high. It has also brought positive gains for most precious-metals investors to this point.

Keep an eye on the market but don’t get too rattled about sudden changes, with the fear of inflation on the horizon, high gold prices are here to stay.


Gold Prices Plummet as Fed Considers End to Stimulus (Update 1) – TheStreet
Gold prices plummet on Friday after the Fed minutes reveal mixed feelings about the central bank’s stimulus programs.

Gold Prices at a 5 month high! Will Gold climb above $1,700/ounce?

Is the end in sight for gold? Or will the price for gold just keep climbing in 2012?
The Wallstreet Journal reports – “Gold futures for December delivery (US:GCZ2) rose $9.60, or 0.6%, to $1,697.20 an ounce in electronic trade on the New York Mercantile Exchange.” We’re only a toonie and some loose change from seeing gold climb above $1,700 an ounce!

It seems that there are a lot of different events occurring or pending that may continue to stimulate gold to even greater heights. Some of the factors identified in the article include:

  1. Increased cash printing by the Fed, causing investors to safeguard against inflation by buying more gold.
  2. European Central Bank meeting
  3. U.S. non-farm payrolls report due Friday, Sept 7, 2012
  4. China’s manufacturing activity fell more than expected recently, causing speculators to think the Chinese government may prop up economic growth by investing in more gold.
  5. Ongoing strike conditions involving approximately 12,000 workers at the Gold Fields Ltd.’s (US:GFI) KDC mine in Johannesburg

All of this would seem to indicate that the precious metal could be on the rise yet again. If I had some gold that I wanted to sell, I’d probably wait to see how things progress in the next few days. How about you? Are speculators just attempting to make something out of nothing or will the price for gold just keep climbing? Share your opinion with Vancouver Gold below!

As reported by the Wallstreet Journal: