The price of gold made another historic leap, briefly touching US$1,610 an ounce earlier today. It has since dropped back but appears to be staying above the US$1,600 mark. (When I posted this story later in the afternoon, the gold price had taken a nose dive to US$1,585. – M.S.)
Investors remain enamoured of the yellow metal. Another record gold price in a month with a steady upward trend is good news for miners and the price of their shares. The entire 2011 year has been one of upwardly trending prices. The average monthly price has gone up in each of the first six months.
What the current economy teaches investors, however, is that if gold goes up something else must be going down. Oil prices seem determined to stay below US$100 per barrel. Investors are still uncertain about the outlook for the Greek economy and the ripple effect across Europe should it fail. The U.S. dollar is loosing ground because lawmakers in that country cannot reach agreement on their nation’s debt with an Aug. 2 deadline looming. (News that a debt deal is near, probably accounts for the fall in the gold price mentioned earlier. – M.S.)
Put that way, there is a great deal of gloom in the world of finance.
Put another way, the situation is at hand where the gold price has nowhere else to go but up.