Thursday, April 16, 2009

Today in Gold: Thursday, April 16

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 retreat as stocks push higher"
Author: Sara Lepro

Main Points: Gold for June delivery fell $13.70 today to finish at $879.80 an ounce.

Gold, which typically has an inverse relationship to the dollar and investor confidence in general, suffered as economic good news continues to spill out. In particular, positive profit reports from Nokia and JPMorgan Chase drove investors away from the safe haven and towards riskier investments.

The dollar and stock market have recovered during recent weeks, the main source of a steep dip in the gold price -- once over $1,000 an ounce less than two months ago.

"If the market's five-week rally continues, many analysts believe gold prices could fall further in the near term."

Analysis: Despite gaining $12.50 on Monday, gold has remained about flat from the $880.10 that it finished at last week. Many experts believe that life remains for gold, but we may be waiting until the third or fourth quarter for a resuscitation. Reports are currently optimistic, but some believe that once top financial companies are expected to succeed on their own funds instead of the stimulus, things will take another downturn.

"The Daily Resource 04/16/2009"
Author: Casey Research

Main Points: Although the gold price has not moved upwards in recent weeks, some take that as a good sign "in the face of falling oil prices and a slightly rising dollar." These should be conditions that would force the price downward, but gold, for the most part, has held its own.

Once gold flirted with $1,000 an ounce a couple of months ago, the landmark price appeared to be something of an obstacle. The same appears to be true now with $900.

"Gold is struggling with $900 an ounce," said Burton Schlichter, Senior Market Strategist at Daniels Trading. "As long as it stays under this level, trading is going to remain quiet."

This IBTimes articles asks what many of us have been struggling with for weeks: "Is gold stuck, and preparing for a correction back below $900, as some believe? Or is the spring just steadily tightening, awaiting that one big event that will release it, sending the gold price rapidly skyward, as others maintain?"

The debate remains open. Dennis Gartman, publisher of the Gartman letter, is recommending gold owners sell at $891 an ounce.

"The uptrend that extends back into the lows of last November and December has been decisively broken," said Gartman, "and since then, the most recent rally attempts have failed at progressively lower levels, while the lows are steadily lower too."

Analysis: There you have it. Sell, Sell, Sell! Ok, maybe not so decisive. Investors are skittish, unsure, and evolving their perception of the economy on a daily basis. While investor confidence is climbing now, bad news can change that in a hurry, thereby driving gold back above $900 an ounce.

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