Sure your 401k is down, stocks are on a roller coaster, savings rates are getting whacked, but at least you will always have gold right?
That yellow metal has been on a roll as the dollar tanks. Not a big shock as it has always been a hedge against currency movement.
However, Gold has been in a bit of too much of a tear. Gold recently busted the $1000 per ounce record level, not seen adjusted highs since the early 1980's. But gold fell nearly $100 an ounce back to the $950 level. The real question is there even support there as many investors feel gold could correct back to the $850 sort of level.
As this increase has been 100% investor driven, and gold is priced in dollars world round, it is easy to see why some are taking the money and running. After a housing bubble an Internet bubble and an Ice cream bubble (OK I made that up) investors want to lock in profits...on something.
From the Report:
With lower mortgage resets, the upcoming elections - which tend to boost the dollar - and the coming seasonal lull for gold, Nadler sees gold slipping to around $650 to $750 in the summer.
"That represents a good equilibrium level for gold, as jewelers will be able to sell gold again," he said. Still, some analysts think Wednesday's selloff is largely a hiccup - a temporary reaction by speculative buyers to changes in the economic climate, which can dramatically impact on the price of gold.
"When you are operating in a heavily overbought market, corrections like the one we're seeing today are very easy to have," said Nicoals Kavalis, a senior analyst at precious metals consultancy GFMS.
So is the dollar finally on track? With all of these rate cuts that would be amazing, but perhaps America's Housing induced cold has been caught by our friends over the pond.