Gold Prices Going Up!
November 24, 2008 by Martha Rooks
For the first time in some weeks, the prices of gold have started to rise. It happened on Friday, after a week of miserable financial news and word that deflation was on the way as fuel prices fall, food and retail prices fall, and inflation backs off. But gold comes to the rescue of investors, edging forward slightly as the dollar weakens.
This is interesting news after months of dismal prospects for miners and mining companies.
I spoke with a foreman who works for a mining company while I was at a family event this weekend. He gave me the “sad news that 1000 people were laid off by our company on Friday. We’re just not doing the work because we don’t have the customers right now.” His company mines everything from sand to salt with minerals and precious metals in between. So this latest news is good for those companies; their workers and those workers’ families.
Shares of the world’s largest gold mining companies jumped on higher gold prices Friday as investors shifted into precious metals and demand for the product continued to build.
Barrick Gold Corporation, the world’s largest gold producer, along with Newmont Mining Corp., the second largest, and other mining firms posted double-digit gains by late afternoon. The price of gold for future delivery jumped above $800 an ounce – up $52.90 to $801.60 by Friday afternoon on the New York Mercantile Exchange.
The renewed interest comes as investors seek safer investments amid volatility on Wall Street. “There’s been a tremendous amount of pressure on gold in recent weeks because as there’s been a lot of liquidity selling,” Barnard Jacobs Mellet analyst Patrick Chidley said in a telephone interview.
“It’s this battle between sellers trying to find liquidity and raise cash and the long-term fundamentals which are for higher gold prices as a result of a weaker dollar,” he said.
Now here’s the key part for us here at ApplesofGold.com: although we hope for a reasonably lengthy delay in rising jewelry prices, the lower gold prices have boosted demand among jewelry manufacturers and investors, according to Chidley. This means that prices, which have been sitting idly while the economy appeared to weaken, may be going up.
Holiday prices are expected to remain low, and some say “big sales” and “huge markdown” will be the bywords this holiday season. But after that, with gold prices going up, expect jewelry prices may start to launch upwards, too. So let the buyer beware: now is the time to shop.
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