Tuesday, May 12, 2009

Today in Gold: Tuesday, May 12

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 slightly higher as dollar falls"
Author: Sara Lepro
Website: Google.com

Main Points: The dollar fell today, leading to a rising gold price. Gold for June delivery finished at $923.90 an ounce, up $10.40.

Gold has been stronger lately, but still has troubles getting outside of the $880 - $930 range. Despite the perfect conditions for a rising gold price -- conditions that would improve if the economy rebounds and leads to inflation -- investors remain wary.

"You might have thought gold would have been doing a bit better under the current circumstances, given the strong move against the dollar," said Philip Klapwijk, chairman of GFMS Ltd. "We're at a trading range in gold at the moment, and it's almost as if something new is required to punch gold a bit higher."

Analysis: What new event could give gold that necessary push? A global economic disaster equaled a temporary stay above $1,000 an ounce. Swine flu barely caused a blip on the radar. In the past, it is bad news that has pushed gold ahead, but it would seem gold has already been severely tested in that area without leaving its bounds.

Might a fully rebounded economy be the answer, resulting in inflation? Time will tell.

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