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February 8, 2010 – On the heels of recent sell offs that many analysts believe to be overdone, gold futures are again on the rise as investors look for price gains. Based on strong support for current prices and an expected increase in demand, futures are pushing back over $1,100 per ounce for short-term contracts and near $1,200 per ounce for August delivery. Recent trading on Globex has been good, with gold being one of the most actively traded commodities.

Although financial concerns in Europe have spurred increases in the US Dollar Index, many analysts are warning that the debt level in the US does not support shifting currencies from countries like Spain and Italy. Investors are likely to see that the dollar is not a good long-term solution, instead taking advantage of gold investment as a better alternative and an asset that tends to be inflation-proof. Gold prices have increased today to nearly $1,070 in morning trading, in spite of only a slight decline in the US Dollar Index.

The fact that gold prices are rising even without a significant fall by the dollar suggests that an increase in gold investment could be on its way. After holding its ground against its three-month low and its 200-day moving average, gold is in a position to begin moving upward, meaning that now is a good time for renewed investment.

It is possible to implement a two-phase approach to gold investment, using bullion for short-term holdings and certified coins for long-term assets. This approach allows investors to capitalize on gold for its excellent liquidity, while enjoying potential long-term gains from certified gold coins. 

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Stewart Lawson

Senior Staff Writer - Gold-Investment.info