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Where Is Gold Going?
What goes up must come down, and so it has been for Gold prices.
Gold fell again today, closing at $613, extending a slump to almost four weeks, as rising interest rates and declining oil prices eroded the appeal of precious metals as an alternative investments and inflation hedge. Palladium tumbled to a 10-week low.
Gold has dropped 16 percent since reaching a 26-year high of $730.40 on May 12. Oil dropped today after the al-Qaeda leader in Iraq was killed, prompting speculation that disruptions of exports will ease. The European Central Bank and the Bank of Korea raised key lending rates, and U.S. Federal Reserve officials have indicated they may follow.
With U.S. consumer borrowing reported to be at a 10 month high for the month of April, The fed may very well increase interest rates further in order to put a clamp on inflationary pressures and to prevent the economy from overheating.
Stay on the sidelines for now.
