, IncGold Prices Delight Investors
June 16, 2010 - The on-going sovereign debt crisis in Europe seems to be the perfect backdrop for rising gold prices as investors’ continue to look for alternative investment channels. The dollar’s decline only added to the concern, and Spain’s and Portugal’s debt levels look as if they might only get worse, as stated by a draft European Commission document.
Gold prices surge ahead, strong in the face of the current economic situation, making investors feel confident in uncertain times. Matt Zeman, a trader at the LaSalle Futures Group in Chicago said, “It doesn’t hurt gold to have a weaker dollar”. He felt that the euro’s position will improve and Europe’s debt situation will support gold in the long term.
In the meantime, gold futures for August delivery went up $9.90 to $1,234.40 an ounce on the Comex in New York — the highest gain since June 7. In fact, June 8 saw a record gold price of $1,254.50 even as the euro saw a four-year low compared to the U.S. dollar. Gold prices have gone up 13 percent in 2010 while the euro has seen a 14 percent dip.
If we look at the history of gold prices, it shows that gold has always traveled in tandem with the euro when it needed a substitute for the U.S. dollar. However, this year, gold has deviated from this trend to see record high prices in all the main currencies. Frank Lesh, trader at FuturePath Trading LLC in Chicago, was quoted as saying, “There is nothing to say that the problems in euro-land are over. Any severe weakness in the euro will spark capital flow into gold,” And with good reason – since gold prices are certainly keeping the investors happy.
Stewart Lawson
Senior Staff Writer - GoldPrice.net
