Wednesday, May 20, 2009

Today in Gold: Wednesday, May 20

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 climb as dollar hits fresh lows"
Author: Sara Lepro

Main Points: The US dollar fell to new lows today, resulting in a rising gold price. The dollar fell to its lowest point against the Euro since January and against the pound in about a year. Gold for June delivery finished up $10.70 to finish the day at $937.40 an ounce.

Investor confidence continues to soar, which is not typically good for the value of gold. However, considering the further weakening of the dollar and increasing fears of inflation, gold remains desirable.

"As the economy improves," says Lepro, "prices for goods and services will increase, which could lead to inflation down the road. At the same time, the Federal Reserve has kept interest rates at record low levels and continues to pour money into the financial system, which has the potential to weaken the dollar further."

Analysis: This is gold's highest point in seven weeks, when the yellow metal was at $941 on March 26. The yellow metal is risen more than $15 in the past two days. Can the momentum be sustained? During the past couple of months, it has not. But the $940 range is new ground as of late.

There is no consensus on the immediate future of the gold price. There is no better time than now, while the price is high, to sell gold.

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