, IncFebruary 24, 2010 – Tumbling during early morning trading today, gold prices dipped below $1,100 per ounce but rallied near midday, posting a nominal 0.5% loss for the day’s trading. After reacting to the Consumer Confidence Index report and today’s Federal Reserve testimony before Congress, gold still held strong at $1,098.70 per ounce at 11:30 AM EST this morning.
As announced this week, the Consumer Confidence Index dropped to 46, representing its lowest level in the past 10 months. This drop is particularly troubling for the Obama Administration, as it has been attempting to assure Americans that the economy is improving despite unemployment figures that continue to increase and the real concern of inflation. Bernanke’s testimony is supposed to allay the inflation fears by claiming that the government can control it, not by denying its potential arrival.
For investors, today will likely set the tone for upcoming gold prices. Should Bernanke convince Congress and the American people that the risk of inflation is minimal; the upcoming gold rally may evolve more slowly. Should his comments confirm inflation fears and lead people to look for safe investment alternatives, prices could raise quickly as people move to gold, the traditional safe haven against inflation.
Investors should continue to watch the day’s events as news from Capital Hill could offer a chance to either pick up some gold at lower prices or witness the start of the next strong gold rally. After an early fall on the day, gold prices are looking to climb as the US economic situation is being scrutinized.
Ronald Stevens
Senior Staff Writer - GoldPrice.net
