Fears over Dubai’s debt problems began to calm as gold continues to march uphill. The dollar index DYX dropped $.45 eventually to $74.43 hitting a 15 month low.
Less than one week ago it was announced by Dubai that they are having difficulty repaying debt and may not be on time with payments. This announcement created a feeling of uncertainty for many investors sparking a higher interest in gold. Also as the value of the dollar continues to diminish the value of gold also increases.
Over the last month we have heard a lot of news that affected the price of gold. At the beginning of September India purchased 200 metric tons of gold. Afterward, we heard news about a lower than expected economic growth rate for the United States.
We also had a rare commentary form Ben Bernake stating that the declining dollar is being watched and no action was needed. Days later the Federal Reserve announced that interest rates will remain low.
Most recently, Sri Lanka purchased 10 metric tons of gold from the International Monetary Fund. Soon afterward Dubai announced its debt problems.
All of theses factors have created a perfect storm for a declining dollar and gold prices jumping to unheard of highs. The value of gold has yet to stabilize as it slides up or down $20 plus dollars per day.
Gold is currently at $1196.48, up $15.33 form yesterdays close.
Check back with Healthy Financial Habits every Monday morning for your weekly gold price predictions. Here you will find current news, information and investment strategies that will assist you in making financial decisions. It is important to remember that consulting with a quality financial advisor is always recommended prior to making personal financial decisions.
Author: Allen Dukes