Earlier today we mentioned the immediate future of the price of gold in our weekly gold rate prediction article. As discussed, we believe that the price of gold will continue to drop all of this week and going into the new year. Gold prices from today showed exactly that trend. Today marked the first day in over a month that the price of gold dropped below $1,100 an ounce. Gold prices have been on the decline as the dollar strengthens due to a better outlook on the economy.
The month of December has not been a good month for the price of gold. In previous months gold prices increased sharply as the United States economy struggled. Individual investors and large central banks were buying up gold in anticipation of a hyperinflation period. When economic indicators such as retail sales and job loss numbers defied what analyst anticipated the dollar index started to climb. In addition the Euro lost strength as Greece’s credit was downgraded earlier this month. As the dollar index increases, the price of gold reacts by moving in the opposite direction. This is what is going on right now.
Gold investors are selling their gold for a variety of reasons. Many investors are selling off their gold in order to cash in before the end of 2009. Others traders have placed a stop loss on their gold assets. A stop loss executes a command to sell if a stock or commodity drops below a particular amount. Some gold sellers are anticipating an increase in interest rates due to a stronger United States economy. This believe is causing some gold owners to sell even though the US federal government said that they plan to keep interest rates near zero in the foreseeable future.
If you are considering selling your scrap gold check out Healthy Financial Habits guide to selling scrap gold. Scrap gold can be an excellent way to earn extra cash for jewelry that you no longer wear or that may be broken.
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 adviser is always recommended prior to making personal financial decisions.
Author: Allen Duke.