Gold has always been considered a safe investment. However looking at the recent drop in the gold prices, It almost appears that the luster of the gold may be dulling just a bit as the price of gold fell closer to the $1,100 per ounce mark. Is this the beginning of a downturn in the price of gold? Is gold still a very safe investment?
Gold is falling despite overall stock market growth
Jobless claims fell by another 6,000 last week, and that seems to have had an effect on the price of gold, pushing it down near the $1,100 per ounce price range. The two dollar drop towards $1,100 is the lowest the price of gold has been for the past two weeks. This drop is unexpected considering that last week, gold grew in price by $20 per ounce. This week, that $20 gain has already been lost as gold has fallen $27 in price. In the past few weeks, there has been a great deal of liquidity in the gold market with over one million ounces being sold during this time frame.
- Spot gold fell to a low of $1,102.85, which is its lowest level since February 25.
- U.S. gold futures for April were down 1.3 percent to $14.20 this week, with $1,108.10 an ounce in heavy trading.
Platinum Prices Rises
While gold prices have fallen slightly, platinum prices have actually gone up by more than one percent to reach their strongest price level in the past seven weeks. The reason for this is due to Japanese buying heavily in platinum on the Asian markets. As well, South Africa, the world’s largest platinum exporter, has announced that the country will not experience the same delays in mine production as was seen last year. Last year, there was not enough power to run the mines and the exports of platinum fell drastically. South Africa has also stated that they do not expect any blackouts during the World Cup of Soccer this year, which should keep the platinum mines running and that is good news for the market.
Crude Oil Prices Fall
Just as with gold, crude oil prices for April has fallen by 34 cents down to $81.75 per barrel. The reason for this drop was because of the strengthening of the dollar against the Euro, which made commodities much more attractive to investors. The U.S. dollar traded at $1.3621 against the Euro, which was an improvement over the $1.3657 that it traded at the day before.
Gold prices have fallen slightly but they are still a great investment that should keep going up for some time now. Gold prices are higher than they have ever been before and it is going to take a lot to hurt that market sector. Platinum prices are also going to be better this year thanks to the higher production coming out of South Africa. As for crude oil, it should go up in price as summer gets here, but expect the crude oil prices to stay between $80 and $95 throughout the next few months.
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