Gold trades modestly higher after steep drop
Gold traded a bit higher today, albeit very modestly higher, after a significant and precipitous drop (see price graph) as bargain hunting and short covering contributed to the yellow metal rising up just a tiny bit in price.
While the jump was by no means high, especially considering the sharp drop, the fact of the matter is that it was nice to see gold rise again in price slightly, even if it was by a very small margin.
With the U.S. dollar weaker and oil prices firmer Tuesday, gold was able to shoot up a little in price coming off the long holiday weekend.
June gold last traded up around $4.80 to come in at $1,573.80 an ounce earlier today. Spot gold was last quoted up around $0.50 an ounce to come in at $1,574.75.
These are definitely bargain hunting prices, at least relatively speaking, and it looks like bargain hunters may play a much bigger role than they usually do when it comes to the price of the yellow metal.
A number of outside factors are still playing a large role in the overall price of gold.
Gold has had a rough couple of weeks. That much is certain and can be evidenced by looking at the price trends.
While the yellow metal hasn’t dropped too severely, it also has not been able to gain based on various bits and pieces of news.
While it looks as though gold may start to come back up slowly but surely, the fact of the matter is that a number of outside factors — most notably the situation in the eurozone, have been keeping gold from really breaking through and climbing back up to higher prices.
Investors are just too nervous with the situation in Greece, as well as the situation over in the European Union in general with the ongoing economic woes which seem to have no end in sight despite the best efforts of various nations.
So where to go from here?
Well, China is still buying gold at an incredible pace, signifying that at least one huge nation is still very ready to invest in the yellow metal.
Rightfully so too, as gold is still gold, meaning that unless the entire world decides tomorrow that it is not worth anything other than an industrial component, it will continue to hold significant value.
Even with prices hovering below what many investors want to see, the yellow metal is still considered quite attractive to most, and many investors (big and small) are still buying up the yellow metal to either sit on it and wait, protect other investments, or both.
The question of when gold will gain a strong footing and make the long predicted and anxiously awaited run toward $2,000 an ounce remains unanswered.
As I always say, if you are in a position to buy gold — especially gold bars or gold coins — and sit on it for a while then go ahead and do so.
Gold will head back up, and if you have purchased some of the popular yellow metal at current prices, then you are going to see excellent returns in the long run.
Similarly, it is always a relatively safe choice when it comes to diversifying investments and hedging against inflation or dips in the various markets such as stocks.
The above article is for informational purposes only and is not a solicitation by End the Lie or Goldco Direct. It is the commentator’s opinion only and not intended for investment recommendations, and does not necessarily reflect the views of End the Lie or Goldco Direct. Any references to outside sources are believed to be accurate. Past performance is not a guarantee of future results. All commodities involve risk. Investors should consult their financial adviser before making any investment decisions.