Gold’s long term endurance touted; America records budget surplus

The Gold price has dropped to a low not seen since 2008. When this happened in the past, it made investing in the Precious Metal a great opportunity. The short-term outlook does not seem to show much change, as long as the situation in Europe continues and the United States’ economy keeps moving upward. However, “On a long-term basis, Gold has a place in most investment portfolios for two reasons: We foresee demand returning from emerging markets, and more and more investors buy Gold as a hedge against inflation,” said Sanjeev Sardana, financial adviser and chief executive officer of Bluepointe Capital Management.

The 13-year stretch of growth in China seems to be losing momentum. Reports of China’s industrial production and retail sales missing forecasted numbers are major factors. The People’s Bank of China is adding about 400 billion yuan into the banking system by cutting reserve requirements. The current interest rates have also raised concerns. “Chances of an interest-rate reduction are still small at the moment,” said Lu Ting, a Hong Kong-based economist.

Something happened in the United States for the first time since 2008. In April, the Treasury Department recorded a $59 billion surplus. Even with this good sign, it is not expected to last. The Treasury is facing a $1.33 trillion deficit for 2012. It is less than last year’s number, but far from positive enough to give investors the confidence they need.

At 1 p.m. (EDT), the APMEX Precious Metals spot prices were:

  • Gold – $1562.40 – Down $23.10.
  • Silver – $28.38 – Down $0.59.
  • Platinum – $1444.40- Down $28.00.
  • Palladium – $595.10 – Down $9.30.
Enhanced by Zemanta