[/caption]Gold is trading above $1,400 today. As of 3:25 pm the price for gold was $1,409.44. That is $12.14 more than the opening price this morning.
The gold price broke through the psychologically level of $1,400 an ounce. $1,400 has been seen as an important resistance level. Investors took advantage of the relatively low prices on Monday morning. The price increase for gold is mostly due to predominant buying, as opposed due to a weaker dollar.
Gold prices started to rally last week, after the Fed announced further money printing. During the next six month an additional 600 billion will be pushed into the market.
But there are also voices that think that gold might not continue to fly. The Street wrote:
"But not all analysts are as optimistic. Some are skeptical that gold's current rally can last. Gold "remains vulnerable to risk reduction and short-covering rallies in the dollar," says James Moore, analyst at thebulliondesk.com. Moore, however, does believes that investors will continue to move into gold as protection against the Fed's looser monetary policy."
There are countries that complain about the paper money injection, as it supports U.S. exports and makes it harder for other countries to compete. The G-20 meeting in South Korea later this week will be the stage for concerns like this.
[caption id="attachment_11794" align="alignright" width="192" caption="Gold price at 4:39 pm. Picture courtesy of goldprice.org"]
[/caption]Update 4:39 pm
Gold continues to trade above $1400. As od 4:39 pm the gold price was $1409.26 per ounce.
While it looks like the quantitative easing is supporting the gold price, not all is well in regards to the world economy.
Robert Zoellick, president of the World Bank Group, served at the US Treasury from 1985-88, and suggests to build a new monetary system and writes in the Financial Times:
"The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values. Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today."
The article mentioned above is by the way an excellent read. If you want to understand world finances a little better, I can highly recommend reading it.
The FT article was published yesterday and could also have contributed to the gold rally today.
You can profit from this gold bull market by investing in gold coins. You might think that $1,400 per ounce is pretty high. Goldman Sachs predicted in October, that Gold may rally more than 20 percent from this month’s record to a high of $1,650 an ounce in 12 months as the Federal Reserve takes action to stimulate the U.S. economy, according to Goldman Sachs Group Inc., as published by Bloomberg.
They also wrote: "Bullion may gain to $1,400 an ounce in three months and $1,525 an ounce in six months". That means, we now already have what was predicted to come within the next three months.
Bloomberg reported later in the day:"Gold Drops From Record as Dollar's Climb Cuts Investors' Demand for Haven"
"...losing as much as 0.4 percent to $1,403.65 an ounce before trading at $1,407.35 at 9:55 a.m. in Singapore." They also note that gold has surged 28% this year. Not bad for a solid investment that has never been worth nothing.
On the next page you can see the updated gold prices for November 9, 2010
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[caption id="attachment_11820" align="alignright" width="196" caption="Gold price at 12:32 pm on November 9,2010. Picture courtesy of goldprice.org"]
[/caption]Update November 9, 2010, 12:38 pm:
The gold price continues to rise in early morning trading. On Tuesday the price soared to $1,422 per ounce. At 12:32 pm the gold price was at$1,423.20. That is $20.20 up for the day.
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