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Gold Investments Increase In Value As Economic Recovery Fears Worsen

June 7, 2011 – The gold spot price continues to rise for the third consecutive trading day, currently sitting at $1,545.50 per ounce, an increase of $1.60 for the trading day and also an increase of $325.50 in the last 365 trading days. It appears that the primary drivers for these higher gold prices are negative real interest rates as well as an ever-weakening United States Dollar. Many investors are currently awaiting an important speech from Federal Reserve Chairman Ben Bernanke, as this could be a great outlook into the short-term future of the United States’ economic recovery and quantitative easing measures. Most importantly, if central banks continue pumping more money into the US economy, this could result in a significantly weaker dollar and increased gold investment prices, as the metal tends to fluctuate inversely with the dollar.

Gold is one of the most popular hedges against an uncertain economy, thus it has drifted higher in the past few trading days as investors continue flocking away from dollar-backed assets. Investor confidence suffered a massive blow last week, as poor economic data showed slower US economic growth and lower confidence in the dollar. Historically, investors turn to gold during times of economic turmoil like the one we are experiencing now, thus it’s no surprise that the metal’s spot price continues climbing towards its all-time record-high of $1,577.40 per ounce. With more and more investors turning their backs on dollar-backed assets, it only makes sense that gold investments could shine amidst this dark and unstable “economic recovery.”

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Stewart Lawson

Senior Staff Writer - Gold-Investment.info