The Gold Price slipped down to $1,316 on Friday in London, but swiftly crawled up $1,324, just a few dollars shy of the London early morning price. The 5.1% slide from last weeks all time high is a result of the Dollar being viewed as relatively more stable during the last few days.The housing started to show economic recovery, which gave some stability to the overall weak dollar. The increased confidence in the dollar prompted some investors to take their profits from the recent gold rally.
But overall the world wide confidence in the dollar is probably not strong enough to let gold prices slip beyond some short term profit taking. Even is the U. S economy would recover completely, it is very unlikely that gold prices will lose all their gains of the recent months.
If the U.S. would decide to cease ALL war activities, then the price of gold might come down significantly, or at least reach some form of plateau. But even then gold would still be a good investment. There are other countries too that engage in stupid activities that create confusion and uncertainty for the future.
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