Wednesday, 4 July 2012

Gold Investments Affected by Uncertainty in Europe and U.S.A

Often seen as the commodity of choice, for investors seeking low risk investments during bleak economic times, gold did not perform well in the first half of 2012. This has likely been the result of continued instability in Europe, lacklustre growth in the US, and no real answers as to when the global economic picture; will begin to improve.

While economic turmoil usually drives bullion higher, gold prices have mirrored riskier assets since late last year due to tight credit conditions caused by the Euro zone debt crisis. And, as long as uncertainty in Europe continues, gold could stay under pressure, despite the expected easing from central banks. It is important to note however, that even though investors are questioning gold, and experts have lowered their gold price forecasts for 2012; new estimates are still above current gold prices.

We should also remember that investors saw this same interruption from April to July of last year, when gold consistently hovered around $1,500, and even dropped in the $1,400s; on a few occasions. With that being said, investors should pick their spots over the next six months, and look forward to gold moving higher; in the last half of the year.


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