Gold Still Trading Near Record Highs In June

With concerns still lingering about the state of the economy

, gold is still trading near its record high in June of 2010. Many investors are finding gold as an alternative to stocks and other equities as preservation of wealth has become a key motivating force. Other precious metals like silver are also trading at new highs not seen in a couple of years.

There has been little change between the Euro and the US Dollar as many believe the Federal Reserve is primed to keep interest rates low. With the possibility of the US economy pulling back, the Yen reached a 15 year high against the dollar. Many people are choosing gold as a safe haven asset as the gold market improves with a weaker dollar. Other reasons that many are moving into gold is the potential inflationary period in the near future.

Gold continues to trade near its record high in June of 2010 showing that the demand for gold bullion is staying strong. As of August of 2010 gold bullion is up 13% for the year and looks to set 10 years in a row of positive gains. Financial chaos in Europe plus the United States lends most experts to believe gold will hold a higher price than last year for 10 years in a row.

UBS raised their forecast on gold for the next three months to $1,300 an ounce which is up from their earlier forecast of $1,200.

The price is also staying strong both in the Euro and the British pound which are trading close to their highs for the year.

Economic analysis has shown that gold bullion is trading more as a currency that a commodity which is likely to continue from international demand from Asia, especially India.

The next meeting on monetary policy by the Fed is set for September 21st which is likely not to have any good news for the economy leading up. The growth of the US economy looks to have stalled and the jobless rate may still be above 10%. Possible monetary policy outcomes from the meeting could have inflationary results down the road which are typically good for gold prices.

As worry increases over the future of the economic growth in the United States many people are choosing safety in gold over other forms of assets or investments. One of the main concerns for many people today is pure uncertainty. It is the uncertainty surrounding the economy that has many people not knowing where to put their money. Gold typically has been seen as a safe haven asset as many of the factors that are negative to the economy are positive to gold prices. It is important to understand that past results are not a guarantee of future gains.

Copyright (c) 2010 Rod Hoss

by: Rod Hoss

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