Tuesday, April 7, 2009

Today in Gold: Tuesday, April 7

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 Rises for First Time in Four Days as Drop Lures Buyers"
Author: Nicholas Larkin
Website: Bloomberg.com

Main Points: The price of gold rose for the first time in four days today, rallying $11.50 to $879.75 an ounce.

"We fell too much yesterday," said Bernard Sin, head of currency and metals trading at Swiss refiner MKS Finance SA. "We fell as much as 3 percent yesterday and a lot of people were hurt."

Analysis: In line with what Sin is saying, gold was bound to rise eventually, even if temporarily. The price was hanging around $950 for some time, so it is bound to be attractive for investors once it plummets below $900 -- safe haven motivation or not. The question will be whether this is the start of some upward momentum or simply a one-day blip on a downward trend.

"Gold price may touch record $1,100: GFMS"
Author: BS Reporter
Website: Business-Standard.com

Main Points: In an announcement contradictory to the current path of the price of gold, a survey by London-based precious metal researcher Gold Field Mineral Services (GFMS) projects that the yellow metal could reach $1,100 an ounce.

Of course, it wouldn't be a direct route. After a summer lull, inflationary pressures and interest rate cuts would benefit gold and drive it's price up to record levels.

"The price may have pulled back a fair bit from the highs," said Philip Klapwijk, chairman of GFMS, "but that was largely just the market’s reaction to jewelry demand crumbling and scrap booming. It’s far from game over for investors and it will be that crowd which sets the price alight."

Analysis: As mentioned before, the projected path of the price of gold is far from a consensus. Though GFMS is bullish, they do acknowledge the current struggles may continue, if not briefly.

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