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Gold Investments Remain Strong

June 4, 2010 - Gold investments worldwide remain strong on fears of a deepening sovereign debt crisis in Europe and weak labor data coming from the US. Hungary is the latest EU country to announce debt concerns. A spokesman for the Prime Minister stated Hungary’s economy is in a “very grave situation.”

According to the European Commission, Hungary’s debt level may reach 79% of GDP in 2010. This figure will make it the most indebted eastern EU member nation. As the crisis in Europe deepens, the bull trend in gold investments strengthens. “In the medium to long term, this may be an opportunity to buy into dips,” said senior vice president at MKS Finance SA in Geneva, Afshin Nabavi.

In the United States, weaker than expected employment numbers caused a drop in stocks and corresponding rally in gold after a week of profit taking. Continuing employment troubles have caused Federal Reserve Chairman Ben S. Bernanke to comment joblessness is one of the “important concerns” for the recovery. “One particularly difficult issue is the continued high rate of unemployment,” he said at a recent forum.

Technically, gold investments remain in a healthy uptrend. The recent sagging in prices was attributed to profit taking. “Gold was pretty much on a one-way street, and it is only natural that we see a bit of a correction,” said Nabavi. Support on the downside has been seen recently in the 1160-80 range and upside resistance was experienced last week at 1230. Currently, spot gold is in a compact range near the important 1200 level.

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Stewart Lawson

Senior Staff Writer - Gold-Investment.info