I can’t always comment on gold prices, you know. Sometimes, I have to sit back and scratch my head in wonder. And this is one of those moments.
We’ve all read the reports and seen the heart-rending pictures out of Haiti. The world’s poorest nation has been hit by a 7.0 magnitude earthquake, killing what the Red Cross believes will be between 45,000 and 55,000 people, injuring tens of thousands more and leaving hundreds of thousands without shelter or food. It’s a grim situation and we all want to do whatever we can to help that painful situation. (If you can, take a moment and donate $10 to the Red Cross by texting “Haiti” to 90999.)
In addition to that new crisis, our global financial worries continue. The hopeful start to the new decade is still being marred by worries, such as the employment numbers released on Thursday, which showed new unemployment numbers taking an unexpected jump. This was actually quite puzzling to economists, and we have to hope it is, indeed, a blip.
Also down: retails sales. They weren’t as strong as hoped or expected in November and December. Experts say it means our recovery is still very tentative.
In spite of these sorry reports, the price of gold continues to slip downward, too. The price today is trending around $1132, down almost $10 on the day. That’s actually a hopeful sign. The reason is because, as we’ve discussed many times, gold is a market hedge in many investors’ minds. They use it as a place to hide money when the dollar lurches or the economy rocks.
So if the price of gold is slipping, that means demand is down and could be seen as an indicator that investors aren’t quite as bearish as one might think. They believe that the economy is coming back, however slowly. They aren’t putting their money into gold, but out there, buying, selling and trading happily in the belief that the recession is over and better days ahead.
I am going to choose to hope with them. For myself, my investments and my world. And for Haiti. I hope you can see your way to do the same.
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Category: Gold Prices