February 25, 2010 – More bad economic news came this week as unemployment soared unexpectedly and consumer confidence plunged. Many economists fear reports like this because it signals continued weakness. Such bad news indicates to many people that the economy is not secure, pushing them out of dollar-based investments and into alternatives, such as gold investment.
The unemployment numbers rose to 496,000 last week, up 22,000 in a week when most analysts expected the total to drop to around 455,000. In addition, the Consumer Confidence Index plunged from 55 in January to 46 in February, marking a 10-month low. As they see increasing job losses, consumers are not sure that the US economy is recovering, suspecting that the recession could return. “It's very important to be aggressive. If we go back into recession, we're not coming out,” Mark Zandi, chief economist for Moody's Economy.com.
With looming inflation and national debt concerns, many people are not comfortable investing in dollar-based assets, rather looking to alternative options such as gold investment. Although the news has recently favored the dollar, its long-term fundamentals suggest that its perceived strength is short-lived.
Bullion and certified gold coins are typically seen as safe-haven investments when the economy is struggling, since they have physical value which increases as the dollar falls. Holdings in these assets offers people the option of a commodity that tends to improve in value as the dollar struggles. Continued negative economic news could trigger an upswing in gold investment, attracting investors who are looking for the best possible way to protect their wealth.
Senior Staff Writer - Gold-Investment.info