What is happening with gold prices today and why? Why is gold, which was on a roll for most of November and December suddenly trailing off? Why is the American dollar rising? Do you think the best case scenario has happened? Has the economy dramatically improved and has President Obama fixed our country FDR style? Er, don’t jump to conclusions yet.
The bottom line is that since gold is directly affected by the dollar, whenever the American dollar increases in price (or any currency, really) the price of gold deceases. This makes sense. Gold is primarily used for investment strategies. Gold is not a replacement for currency. If currency is widely distributed and retaining value, in theory, there is no reason for gold—unless of course, you want to build a heavenly temple of gold, ala King Solomon.
Another reason why gold prices today (as of December 17, 2010) may be lower than average, is because of the year-end strategy of regular gold investors. Some gold investors tend to sell the metal right before the end of the year, in order to take advantage of gold’s ten-year annual gain streak. In anticipation of this trend, many investors take action and thus the price of gold falls slightly.
Even now, some experts are predicting that gold price will continue to fall until the end of January. Remember, this year overall has been good. Gold rose 25% from last year and actually peaked on December 7th at $1,432.50, up from the previous peak, which was $1,424.
What about gold prices today and tomorrow? Many are predicting that gold will hit yet another peak in 2011, and perhaps an even greater high in 2012. Talk of gold hitting $2,000 in 2012 is not uncommon. Now if 2012 comes along, and it’s not the end of the world as the Mayans predicted, wouldn’t it be great to have your gold assets appreciate in value?
So if you are interested in gold prices today, why not talk to a coin dealer about investing in this precious metal? You have options in coinage, ETFs, futures and gold bullion. Remember that gold is alone in its ability to accelerate during recession and depression. It never hurts to have a surplus of gold. With every negative news item that comes out about the Federal Reserve, the tax rate, the recession, the unemployment rate, the 2012 election, WikiLeaks, and every other news item on Google, you can bet that the majority of these stories are negative—and that takes its toll on the price of the dollar. Why not arm yourself with a golden shield in 2011?