Gold Prices Trending Upward
July 20, 2009 by Martha Rooks
Gold, the bellwether of market and economic trends, has opened slightly higher this week. The reason? A somewhat weaker dollar.
There has been a five week slump in gold prices, but as last week closed, the price jumped up by about $24. The precious yellow metal reopened on Monday at $952.40 and then started a slow, penny by penny, climb upward. The dollar is being tugged downward by oil prices, which are almost always troublesome.
There was some good news for the dollar last week, which was why the price hike, however slight, was surprising. Both Goldman Sachs and JP Morgan Chase reported their earnings and surprised Wall Street. Goldman Sachs had earned roughly twice as much as expected, over $3 Billion in this lengthy bear market. While JPMorgan Chase reported its own happy news. The recovery of these two banking giants was good news in this period of long faces and boosted morale of investors while the larger market waits to see what good, if any, this news will do.
But while bankers celebrate the appearance of financial health, the dollar still hasn’t made much of a move to recover. The Dow Jones Industrials had their best week in months last week, but there is still more confusion over exactly what is going on. While investors await this week’s additional earnings reports, (American Express, Boeing, and Caterpillar, to name a few of those slated) the dollar has continued to slide, hitting a six week low against the euro. What will happen next is anyone’s guess.
When times of such great uncertainty, gold is generally considered a safe haven for investors to stash some of their (potentially) unreliable cash. And they may yet do that.
On Tuesday and Wednesday of this week, another indicator of the economy’s health will proceed to take center state. U.S. Federal Reserve Chairman Ben Bernanke will go to Congress to make his semiannual report on the economy. Investors will be keenly watching what goes on there for indications of how soon any recovery might be seen or more importantly felt. They will also want to learn from Bernanke how the government intends to wean the economy off all those government dollars that shored it up last Fall. The Fed slashed interest rates, offered rock-bottom prices on loans to keep banks afloat, and purchased government debt to ratchet down the costs of borrowing. It also pushed the Treasury to simply print more money.
The markets “thumbs up” or “thumbs down” will be swift and potentially quite painful to watch. But those who have purchased gold may know a little stability in what could be a sea of disappointment.
You Might Also Like:
- Good News for Gold Buyers: Prices Level Off
- Gold Prices Going Up!
- Gold Prices Rocket Up, then Dip Slightly
- TOP 10 MOST
POPULAR BLOG POSTS
- The Real November Birthstone: Citrine or Topaz?
- Why is Platinum More Expensive than Gold Jewelry?
- Understanding the Price of Platinum Jewelry
- Certified Diamonds vs. Non-Certified Diamonds
- Rhodium Plating White Gold
- Jewelry Hallmark Guide
- The 4 C's of Diamonds: Which C Matters Most?
- Platinum vs. Titanium Wedding Bands
- Price of Gold Per Gram
- Gemstone Ratings