Each weekday, Cash4Gold will troll through the web's gold banter and post some of the bigger or more interesting stories. Following is a run-down of today's features:
"China buying 'could push Gold Prices past $1,000 per oz'"
Main Points: The price of gold is on its way back up, and according to BullionVault.com it could soon approach $1,000 an ounce once again. The price of gold was last over $1,000 an ounce in March of 2008.
The main factor for gold's revival is not so much the poor global economy as it is the recent news that China has bought more than 450 tons of gold to increase their stockpile to more than 1,000 tons.
According to Carey Smith, an analyst with Alto Capital, the news from China is what drove the recent gold rally. "It put a bit of a rocket under the gold price. I mean, it's run from about $860 when they announced it to, at the moment, about $917," said Smith. "So it's once again trying to go through that $1,000 mark."
Analysis: This explains some things. The upward trend has otherwise defied logic given that there haven't been any major negative economic changes during the past couple of weeks that would drive the price of gold upward. The demand for gold as a result of the India gold festivals may have contributed, but China's activity is also a factor since it would affect supply.
"GLOBAL MARKETS-Oil, stocks fall as flu sparks risk aversion"
Author: Herbert Lash
Main Points: Gold for June delivery dropped $5.90 to finish at $908.20 an ounce on Monday amid fears of a global pandemic associated with the swine flu.
Analysis: This behavior is not consistent with what we've come to see when Wall Street gets jittery. Guardian says that investors turned to the US dollar as a safe haven; typically, we'll see the dollar fall along with stocks as investors turn to gold as much safer investment. According to Guardian, the price of gold only fell $5.90 due to its safe haven appeal. This could be a sign of an impending rebound tomorrow.