06 April 2009

Falling GOLD prices ???

Normally, Gold prices will advance whenever USD weaken. However, the scenario is different for the past one month.

And, WHY ?

As we all know, USD had weaken for the past one month due to lost of confidence arising from the credibility of U.S governement to revive their economy. Thus, questions on the ability of highly-debted U.S to trim down deficit in the medium-term arosed. Even though, President Obama's assurance to China that their investment in U.S treasuries papers are secured, people around the world seems had lost faith in USD for the short-term (if not long-term).

Instead of preserving their wealth by investing in gold, people are taking a higher degree of risks now. They are moving out from gold investment into equities around the world, especially Asia-Pacific. This could be proved by the evidence that gold spot price had fallen to around $870 from over $920 a month ago. And, in the same time, MSCI Asia Pacific Index had increased 23%.

So, should you invest in Gold or Equity now?
Pretty hard to answer, right?

1 comment:

  1. i think this is temporary only. many speculators are taking their profit after a good run on gold prices.

    ReplyDelete

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