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March 4, 2010 – Good economic news failed to benefit gold investment prices, as the metal tumbled in morning trading today, falling $9.10 to $1,131.50 per ounce as the US dollar rose 0.653 to 80.64.

After soaring to 494,000 new claims last week, initial unemployment filings improved to 469,000, a significant improvement and the smallest total so far this year. In addition, it was announced that nonfarm productivity increased at a 6.9 percent annual rate in the fourth quarter of last year; a number which represents the biggest one-year gain since 2002.

The Institute of Supply Management also said its Purchasing Managers Index exceeded the forecast 51.0 percent mark and registered a seasonally adjusted 53.0 percent in February. Any number above 50 percent indicates growth, leading the Federal Reserve to state that the US economy “continued to expand” during the month.

Since these numbers were within the expected range, analysts did not expect gold investment to benefit from their announcement. “This series of reports are on target, which means you probably won’t get an outlier” in the government’s payroll report tomorrow, said Doug Roberts, chief investment strategist for Channel Capital.

Today’s falling gold price is seen by some analysts as investors simply following technical buying techniques and profit taking. "This is a healthy and normal action of the market... investors are selling and liquidating their positions as the market has been overbought since last week," said Jun Calaycay of Accord Capital Equities. 

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Stewart Lawson

Senior Staff Writer - Gold-Investment.info