Monday, June 1, 2009

Today in Gold: Monday, June 1

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 flat as dollar falls, stocks rally"
Author: Sara Lepro

Main Points: Gold for June delivery dropped 30 cents to settle at $980 an ounce as appetite for riskier stocks increased -- despite a weaker dollar. Gold typically thrives on a weakened dollar, but it may have been what kept its value afloat amid increasing investor optimism.

Better-than-expected reports on manufacturing, construction and consumer spending led investors away from gold, generally considered a safe haven asset during tough economic times. The reports were so good that there were whispers that the recession may be coming to an end.

"Today you've seen money move into stocks," said George Gero of RBC Capital Markets Global Futures. "People are more willing to buy some risk than they were a week ago."

Analysis: Gold was in the midst of an incredible rally. Is it over? This goes to show you, once again, how quickly things can change. If similar reports continue to come in about the recession's upcoming demise, gold's value will lean heavily on its inflation hedge appeal.

If the dollar doesn't weaken yet again tomorrow, you'd have to expect this latest information is bad news for the immediate future of gold.

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