Monday, April 6, 2009

Today in Gold: Monday, April 6

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:

"Gold prices slump further on lack of demand"

Main Points: The price of gold continued its recent downward trend today, falling $24.50 to finish at $872.80 an ounce -- the lowest close in more than two months.

Stocks pulled back slightly today, but the dollar -- continuing its inverse relationship with gold -- was strong.

"Gold prices have been suffering amid increased risk appetite on Wall Street and signs of strength in the dollar. The Dow Jones industrial average has rallied more than 22 percent since the beginning of March on an increasing number of better than-expected readings on the economy."

Analysis: This is good news for the economy and bad news for gold investors. There are a couple of ways to look at this recent decline: 1) you could take advantage of the recent drop, that prices will turn around once realities of continued economic troubles encountered; or 2) the economy is still far from strong, so you should sell gold now before the price drops even further.

"IMF gold sale may push down prices below $800"

Main Points: Gold has dipped of late, but this may only be the beginning. At the recent G20 Summit, world leaders agreed to allow the International Monetary Fund to sell 400 tons of gold to the open market in order to raise funds.

"Gold prices are set for a big fall in the next two to six months mainly because of the IMF gold sale. There will be abundant supply of gold in the market in the coming months thanks to the release of 403 tons of IMF gold. Moreover, with stock markets looking up after the big falls, gold prices are likely to fall to $800 or below $800 levels," bullion analyst Mark Robinson told Commodity Online.

Analysis: This story, combined with the improving economy and value of the dollar are flashing warning signs for anyone investing in gold. And if you own scrap gold, it may be a good time to send it in to Cash4Gold.

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