Gold Prices to Continue Losing?

Written By Brian Hicks

Posted May 17, 2013

While many people have been hopeful that gold could soon be on the rebound, recent numbers aren’t exactly boding well for the precious metal.

The price of gold fell $9.40 to $1,387.10 per ounce yesterday morning, continuing the longest losing streak for the metal since 2009.

gold bear sidebarIt’s difficult to say exactly what has been contributing to gold’s decline, but many believe that it has to do with the fact that the dollar has been firming, as well as the recent gains being seen in U.S. equities.

Economic data coming out of the U.S. may be improving slightly, but this isn’t to say that it is the culprit behind gold’s price trouble. After all, consumer prices fell in April slightly, and weekly jobless claims have been on the rise as of late.

Typically, information such as this that might indicate a down economy is beneficial to the future of gold, but the metal hasn’t been taking any cues from these numbers; it continues to fall in price despite any of this.

In mid-April, gold had hit a two-year low, and many analysts believed this would be the turning point the metal needed in order to once again rise toward prominence. With the current price only $60 away from this low, however, fears that gold may continue to lose are becoming more and more evident as each day goes by.

The State of the Gold Market

The current state of the gold market is anything but attractive for those who have already invested a great deal of wealth into the metal. After enjoying a bullish run for 12 years, gold finally began to fall off, creating an air of nervousness for investors throughout the world.

There is a lot to be concerned about in regards to the prospects of gold’s future, much of which not only has to do with the price of the metal itself but also with the effect all of this could have on the mining companies that help bring gold to the market.

If gold prices continue to flounder, mining companies could easily take a rather big hit. This is especially true of companies that have already invested millions of dollars into furthering their discovery programs, as it can be difficult to repair such a scenario.

If gold is trading at an exceptionally low rate, it should stand to reason that mining companies would have a lot to worry about. As gold prices fall, so too can stocks for these and other similar companies in the industry.

The Future of Gold for Investors

It may seem as if now is not the time to even begin to think about investing in gold, but those who have high hopes for the future would argue otherwise.

There are a lot of factors that are affecting how gold is being sold right now, and to say that these are a constant for the future would be overlooking the reality of the situation. Gold may not be looking exceptionally good at the moment, but this could all change.

For example, one of the main reasons gold is selling off at such an alarming rate is the fact that the “last selloff” is approaching rather quickly, which has many investors wondering whether or not there will be an extension, as MarketWatch reports. It may be affecting the market at the moment, but this is something that won’t likely have a bearing in the near future.

Investors who haven’t already gotten involved with gold may find now to be the perfect time to jump in. On the one hand, gold prices could continue to slide even lower, which would make it a wise choice to wait until things hit “rock bottom” before entering into the market.

Even so, however, prices will inevitably improve, meaning those who buy now (or soon) are likely to benefit in the future. The decision regarding which route to take may not be easy, but there’s no getting around the fact that if the market improves in the near future, now is the time to buy up gold.


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