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April 20, 2009 - The gold spot price has increased nearly 2% today as safe haven demand spikes as a direct result of heightened credit worries and speculation that the United States financial crisis may continue getting worse. Global equity markets have already fallen more than 2% after the first-quarter earnings reports from many banks that showed better-than-expected earnings with dangerously high toxic debt. These bank stocks are falling significantly today, with Bank of America dropping 16.2%, Citigroup Inc. dropping 15.6% and J.P. Morgan dropping 4.5%. Banks have done impressively well in the last few weeks, and now short-term projections are expecting a bearish run that may benefit the gold spot price due to wise investors flocking into safe haven precious metals as opposed to unstable stocks. The tug-of-war between risk and safe haven demand continues, and it looks like the safer assets will take prominence this week.

By around 1:30 PM Eastern Standard Time, the gold spot price is sitting at $884.40 per ounce, spiking up $15.81 or 1.81% for the trading day yet coming down $68.20 or 7.16% in the last 30 trading days. The latest market projections are expecting spot prices to fluctuate between $840 through $1000 per ounce within the next few weeks as a result of ongoing instability with the majority of financial markets and commodities. It’s very important that we keep a close eye on the strength of global stock indexes because any further weakness may result in significantly higher safe haven demand, which in turn would be very beneficial for precious metals.

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Arthur McGuire

Senior Staff Writer –-Investment.info