Tag Archives: gold

GOLD PRICES HAVE THE LOWEST

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Gold futures contract fell to its lowest in 12 weeks since the Federal Reserve (the Fed) give the sign would not provide additional monetary stimulus. The Fed’s statement gave a positive sentiment to the U.S. dollar and gold dropped as an alternative investment.

The U.S. central bank will not provide additional monetary stimulus unless the U.S. economic expansion is disrupted or prices rose at a slower rate of 2 per cent target. The statement released on Tuesday (03/04/2012) local time, referring to a meeting on 13 March.

As a result, the U.S. dollar rose to its highest level for a week against six major currencies. On the other hand, the euro weakened Spain’s debt.

DOLLAR HIGHER, GOLD FUTURES PRICES DECREASING

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Gold futures prices fell along with the strengthening U.S. dollar against the euro so eroded the demand for gold as an investment alternative. Gold futures contract for February delivery fell 0.1 percent to 1596.70 per troy ounce (equivalent to 31.1 grams) at 1:59 PM at the Comex in New York on Monday (19/12/2011) local time.

The strengthening U.S. dollar not the euro zone because of the condition is still bad. European Central Bank President Mario Draghi said, a substantial risk to the economy of Europe is still there. The euro also fell 0.5 percent. It will take much time for investors to regain confidence in gold as a protector of the crisis, given the magnitude of shocks in recent years.

Nevertheless, Andrey Kryuchenkov, an analyst at VTB Capital in London, Monday, remained optimistic gold will perform well in the long run. “Gold will suffer from the recent turmoil because of the liquidity of U.S. dollars, but in the long run gold will remain solid,” said Kryuchenkov.

According to him, an accommodative monetary policy in the world will continue to secure the role of gold as an inflation protector.

BEST INVESTMENT: STOCK AND GOLD

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.Investment provides many opportunities for investors to develop the capital into high-value products and grow more significantly. There are many ways to protect assets and investment capital to grow and valued in accordance with expectations. In addition to avoiding loss of principal (capital preservation), the main consideration is to beat inflation investing. Because inflation eroded the purchasing power that effectively reduces prosperity. Based on these two considerations, both gold and stocks proven to beat inflation.

Over the past five years, can balance out the performance of gold stocks. It is strongly associated excess liquidity that will not only lead to dollar weakness and inflation as the traditional factors that drive the price of gold. However, the advantages it has lowered interest rates which led gold storage costs dropped dramatically.

Over the past five years, can balance out the performance of gold stocks. It is strongly associated excess liquidity that will not only lead to dollar weakness and inflation as the traditional factors that drive the price of gold. However, the advantages it has lowered interest rates which led gold storage costs dropped dramatically.

We expect the Fed will be more careful poured liquidity due to already high growth of money supply. Meanwhile, liquidity needs for re-financing the debt would create an international interest rates move up.