(All contect in these articles should be viewed as opinion by our AP's)
The Gold Bugs in a Quandary on lack of bullish signals during Euro Crisis
by: Tyler Wood May 9th, 2012
Comex gold futures prices are trading lower and hit a fresh 17-week low Wednesday morning erasing any gains for the year. The market place is in another bearish commodity “risk-off” mode as the European Union debt debacle is now in sharp focus. Technically related selling has hit the gold market hard this week. June gold earlier traded down $17.30 at $1,587.20 an ounce (Source: CMEGroup)
The precious metal has fallen in value by almost 4 per cent this week and is off about 1 percent Wednesday.
The collapse looks surprising given that investors are seeking havens in response to the political and economic uncertainty in Greece. Investors have been pouring into the U.S. dollar for safety, which can work against the price of the yellow metal, but there is more going on here than currency swings. (The price of gold is also declining in terms of the euro). Traditionally, gold rallied during times when the future of the euro looks threatened, as it does today. But that is not the case.
What gold appears to be telling the market is that while we may be going through a period of turmoil in the short term, this could force politicians to make the difficult decisions that could strengthen the global economy and financial system over the longer term. Time will tell.
Best Wishes,
Tyler Wood
Alternative Investment Specialist
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