If you like me... Bookmark me!...

Home » Gold and Oil

Gold prices soar past $1,100

18 February 2010

Gold prices have been on the rebound in the last two weeks after touching a near-term low at price on February 5th of $1,052.25. With a current (February 17) gold spot rate of $1,114.70 per ounce, the commodity has increased in worth by over $60 in 12 days.

Though down slightly from yesterday’s New York Mercantile Exchange gold price close of $1,117.80, gold is still up around $15 from the February 15th close price of $1,099.50.

Gold has historically moved inversely with the value of the dollar, which held true during its fall from $1,218.25 to $1052.25 in less than two months from the end of 2009 to the beginning of 2010. However, more recently, gold speculation has held steady even as the dollar has continued to firm up against its European counterparts and other major currencies.

Concern about the ongoing unemployment issue continues to call into question the current stability of the US economy. Despite the strong GDP report from last quarter, there is still a sizeable contingent who believes the road to recovery is going to be long and bumpy.

Some analysts are even suggesting that unemployment is going to remain high for much longer than previously expected. In the mid to late parts of 2009, most forecasts said unemployment would peak at 10 per cent in early-to-mid 2010 before declining.

Now, some are calling for high unemployment potentially to last for years as the depth of the economic turmoil unfolds. The next unemployment readings should be interesting as the latest reports actually were surprisingly better at 9.7 per cent, compared to an expectation of 10 per cent.

Even though the unemployment rate was better, the number of jobs cuts was higher than analysts had anticipated.

Gold prices have always been and will continue to be greatly impacted by perception on the global economy. When speculators are concerned about the value of currencies or potential risks tied to growth investments, they often turn to gold as the universal “safe money” investment.

Gold has produced a consistent annualized rate of return for the first decade of the millennium of nearly 17 per cent. This is very comparable with peak decades of performance for stock indexes, often considered the most lucrative long-term investment.

Neil Kokemuller
3:40 PM EST
Wednesday, February 17, 2010

Sending money abroad? Converting currency? exchange rates
Forex Trading     Exchange rates     Dollar exchange rate     Pound exchange rate     Euro exchange rate
Subscribe to Forex Rate - Currency News by Email