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Price of Gold Hit a New Record Today

Gold prices hit a new record today after data from the United States showed slower than anticipated economic growth. Costs for food and gasoline have risen, and consumer spending has slowed. The US debt and out-of-control spending, and borrowing has affected the U.S dollar which has continued to slump.

This comes on news from the Federal Reserve that low interest rates will remain a US policy for an extended period of time. Inflation in the United States has risen at its fastest rate in two and half years.

Precious metals have gained for 10 of the past 11 trading sessions. Investors continue to seek a safe haven for their money, due to rising inflationary pressures. The recent U.S jobless news revealed an unexpected jump further fueling gold’s momentum.

The price of Spot gold rose to an all-time high of $1538.35 an ounce today. The weaker dollar is widely seen as the culprit for rising gold prices. The recent macroeconomic report has fueled speculation that the US’s loose monetary policy will continue to be needed to boost the economy. Michael K. Smith, of T & K Futures and Options recently said, “Bernanke basically said, ‘hey, we are going to let the U.S. dollar just get crushed.”

Silver was also a big winner today, and its low price still makes it a prime candidate for investors. Widely viewed as a poor man’s gold, silver prices jumped to a new record today. Silver’s huge price swing role as 3.4%, as investors flocked to precious metals to capitalize on Silver’s much lower price than gold.

 

Price of Gold Rebounds

The price of gold rebounded today following Tuesday’s decline and the announcement from the Federal Reserve that they will keep their key interest rate at a historic low rate of low range of 0% to 0.25%. The Fed came to a unanimous decision to let its controversial $600 billion treasury bond purchasing run its course in order to keep short-term interest rates close to 0%. They gave no indication as to whether or not they would continue pumping large amounts of money into the financial system.

Federal Reserve Chairman Ben Bernanke is scheduled to speak today, and many hope he will address concerns about rising inflation fears associated with the decision, and the US debt. Ben Bernanke’s meeting with the media is set to begin at 2:15 PM Eastern. Many analysts don’t expect him to say anything but scripted remarks he has previously made in the past.

Gold investors continued this month’s purchasing spree on the news that the Federal Reserve will be slow to raise borrowing costs. Since this news is perceived to further weaken the dollar, many investors are turning to precious metals as a safe haven. The fact believes that by keeping the interest rates at a historic low it will help to stimulate the economy. However, this weakening of the dollar is proving beneficial to Gold rates. Keith Springer the president of Springer financial recently said, “All of this will move gold and silver higher as it will increase inflationary pressures and lower the dollar further.”

In other news Barrick Gold reported a 22% increase in their first-quarter profit. This news was in line with expectations. The company made a surprise bed of  $7.65 billion bid for Equinox Minerals. The founder and chairman of Barrick Gold, ,Peter Munk recently announced to investors during an annual meeting that, ” notwithstanding the company’s bid for copper miner Equinox, Barrick remains firmly committed to being the world’s top gold miner.”

Gold Mutual Funds

Investing in gold mutual funds can be a good way for investors to get in on buying gold if they are generally unsure of which type of investment is right for them, or they want to diversify their existing investment portfolio. Buying a gold mutual fund means you invest your money into a fund, or pool of others investors money which is invested in a portfolio containing many different gold stocks, bonds and securities.

Purchasing gold mutual funds is often perceived as a safer investment, since the risk is spread over many different types of investments. However, risks and rewards depend heavily on the investment methods used by the particular investment firm who handles your portfolio. However,  gold mutual fund prices can often readjust to daily news and move faster,  both up and down, than spot gold prices in day to day trading.

There are many different types of gold mutual funds. You can choose one that fits your specific investing goals, such as mutual funds for conservative, or more aggressive approaches. You can also select mutual funds based on the type of investments they purchase. For instance you can select mutual funds that only my gold stocks, invest in mining companies, invest in gold securities etc.

With a mutual fund your money is pooled together with other investors providing a fund with extra clout to to purchase a greater diversification which can help spread the risk. Buying into this type of fund is also convenient because you won’t have to be the one making the hard decisions about which companies to trust, stocks to purchase, as well as whether to buy, sell or hold depending on the latest news. For many new investors in gold this can be an easy way to get into buying gold when you are relatively new to it.

Some of the more popular precious metals mutual funds are the Midas fund, US global investors Inc., Pro-funds, Rydex, Tocqueville Asset, and Vanguard group. Just because these are some of the more popular funds doesn’t mean they should be the ones you select. Always do your own due diligence to determine which mutual fund investment companies are right for you.

Of course investing in gold mutual funds to have some downsides. For one, they are often fees associated with these funds such as sales, and management fees. All mutual funds have management fees that go to pay the managers and decision-makers who operate the fund. These fees go to pay research, and overhead costs for the fund managers. Another important consideration when purchasing mutual funds is that much of the decision-making will be left in the hands of someone else. Therefore it’s important to be comfortable with the investment firm you decide to select. Carefully analyzing their past years track records can give you an indication of their potential.

Selecting a gold mutual funds that have been in operation for several years can give you peace of mind. It also helps if the investment firm who handles the mutual fund has been around long enough to have experienced both Bear and Bull markets. This way you’ll know your money managers are equipped to handle whatever type of climate the markets throw at them.

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Before investing in a gold mutual funds carefully decide whether you want an aggressive portfolio or lean more to the conservative type of investing. Many firms that invest in gold mining stocks can have lucrative returns, as well as considerable risk.  You’ll also want to determine whether you will be reinvesting the funds distributions that your portfolio earns. Simply put, will you be investing the income your portfolio generates back into more purchases are not.

You’ll also want to look into the objective of the gold mutual fund. You can usually find the fund’s objective right from the homepage of their website. Furthermore, it pays to be clear on exactly what they will be investing your money in, how diversify your portfolio will be, and the cost including fees that you will need to pay. You will want to make sure you know exactly how the gold mutual fund handles your income distributions. Is it easy to transfer money into your own banking account, or cash out? Finally, you’ll want to carefully look over the track record of the gold mutual fund to see how well it has performed over the last several years.

Gold Futures Continue to Climb

Gold Futures continued to increase in value today well above the $1500 an ounce level on news of a weakening dollar and in anticipation of the long Easter weekend. The markets will be closed this Friday in observance of Good Friday Easter holiday.

Stephen Platt, an analyst for Archer Financial recently said, “The dollar is the major motivator there right now.” Another analyst named Tom Kendall of Credit Suisse said, “We’ve seen the dollar weaken pretty much across the board this morning, even against the yen.”

The price of gold per ounce at another record acts $1509.60 while spot gold prices increased slightly. Gold for delivery in June at the Comex division of the New York Mercantile Exchange, added $4.50 or roughly or 0.3% to 1,503.40 an ounce. In total gold prices have gone up 5.4% month alone and is tracking towards the six week in a row of price gains.

Other precious metals such as silver futures for May delivery has virtually exploded in value with gains of $1.21, or 2.7%, for a $45.68 an ounce price. Many investors who consider $1500 amount gold to be too high, are opting to invest in silver to safeguard their wealth.

James Moore, analyst at FastMarkets believes, “there is the risk of deeper corrections across the metals as long liquidation is seen due to the long Easter weekend.” However, he expects these possible dips to be seen as buying opportunities for investors.

 

Price of Gold Increases Above $1500 An Ounce

The price of Gold raised above $1500 an ounce yesterday, and today continues to climb. $1500 an ounce gold was an all-time high milestone. Today major stock markets shot up in large part due to strong corporate earnings in Europe and the United States. Overall there was a prime commodities rally after the Dow reached a near three-year high.

However, weakness in the US dollar, and Greek debt defaults concerns with the Euro continue to dog the currency markets. Inflation and debt worries continue to push commodity prices upward. Currencies that benefit from higher commodities including the Australian, and Canadian dollar are performing well. Bullish investors of Gold call options have been very active this week.

According to analysts at Capital Economics we can expect to reach $1600 an ounce before the end of the year. Some experts anticipate gold will continue to climb and could even reach $2000 an ounce before 2012.

The main drivers of high gold prices lately are due to slower than anticipated economic growth in the US, Asia and Euro zone, as well as destabilizing events such as the earthquake in Japan and political unrest in the Middle East. Another factor played a part in the rise of Gold is the support for finding an alternative to the US dollar as the world’s reserve currency.

Jim Steel a precious metals analyst with HSBC recently said, “Any increase in non-US dollar assets would likely be indirectly supportive of gold, especially if it weakened the U.S. dollar’s status as a reserve currency.” Gold futures hit a record for the ninth time so far this month.

Another big winner this week was silver which rose above $45 an ounce for the first time since 1980. This is a 31 year high for silver. It has increased by almost 150% in the last year alone. Gold and silver prices often rise in times of economic upheaval and news of problems with the economy. With debt and inflation concerns being fueled by the S&P’s recent downgrade of the US debt outlook from stable to negative, it looks as if precious metals will continue to climb.