June 28, 2012 - Gold investors have something to celebrate about this week, as news reported the yellow medal jumped in price to $1,578.40 per troy ounce on the New York Mercantile Exchange's Comex. Gold prices can and are affected by some macro-economic factors. Recently the influence is expected to be coming from Europe. European Central Bank executives have been speaking to the press and mentioning the possibility of cutting interest rates which tends to create a jump in gold assets such as futures. This is good news for those who hold gold today.
In other news, Reuters reported that 3 of the central banks in the Euro zone sold off a portion of their gold assets due to what was required of them by the most recent Central Bank Gold Agreement. In all, among the 17 European Central Banks, around 1 million euro's worth of gold was converted to currency, but well over 432 billion euros worth of gold is still held by these banks today. This certainly signals something for gold investors who look to institutions like these to see how the world's top investment experts handle their assets.
Speaking to the press, the head of TD Security's commodity strategy division commented on the likelihood of a rate cut from the European Central Bank, "Is it possible? Sure. Do they do it imminently? Probably not. Let's wait for the summit."
July 5th will be the deciding date when bank leaders meet to discuss whether or not a rate cut actually happens. Observers remain divided, but typically any way the banks goes will end up being good for precious metals because if there is a rush to buy gold, then gold prices will rise in reflection of this. If there is not, then it may mean that investors are choosing other places to invest. This gives opportunity to those who want to get in while prices are relatively low.
So is this the topping out point for gold prices? Not according to a columnist for the Wall Street Journal. Though crude oil and gold prices have been underperforming in the eyes of some, the columnist believes that gold is set to make a comeback in a big way. By the close of September 2012, some strategists are predicting that gold will jump nearly $150 an ounce to $1,700 because gold remains such a viable and widely supported safe haven investment.
As a reporter at an MSN affiliate outlet noted, "Gold, which doesn't earn interest, tends to outshine other havens like government bonds during times of falling interest rates, as the returns of interest-bearing assets are diminished."
For long time gold investors, this news merely confirms what they have based their long term investing strategy on; but for those newly considering the power of investing in gold, this is quite powerful news. Despite the havoc of markets and other assets out there, gold continues to perform well and hold its value with more of the same behavior expected in the future, say many top investing analysts.Report Filed: