, Inc5 February 2010 – While the US dollar strengthens against economic woe in other countries, gold prices and foreign currencies have fallen recently. Many investors triggered sell orders as gold fell below its three-month low, and risk aversion became a theme for many in the face of the continued climb in the American currency.
Although there is no historical connection between gold prices and world currencies, investors in have been hedging against economic problems in Europe by moving to the dollar. This shift is considered by many analysts to be a temporary situation, given the lack of underlying support for the dollar and the fiscal instability of the United States’ economy.
Gold appears to be the most logical benefactor when investors again look at the US economic situation. Gold prices have tumbled below their three-month low, but the fundamentals of the commodity show no signs of keeping them down. High demand, low available supply and economic distress in the US will once again bring investors back as the current rally by the dollar subsides.
Instead of selling, now is a good time for investors to consider buying gold. Falling prices are a bad sign for weak commodities, but gold has the indicators that suggest another climb as prices look to stabilize and begin to rise. Investors should consider a strategy of purchasing bullion or certified coins on the lower prices in order to hold winning positions when the dollar levels off and the gold prices reverse their trend and start to rise.
Ronald Stevens
Senior Staff Writer - GoldPrice.net
