Gold has had a resurgence recently. This comes as good news for investors and people that follow the market closely. As of today, gold is on track for its biggest weekly gain in five weeks. Several analysts are saying that the precious metal that we once used to pay for everything may have good times ahead. The Federal Reserve also surprised the market by announcing that it would continue bond purchases, which is currently at $85 billion per month.
CNBC mentions that John Meyer, a mining analyst at SP Angel has said these stocks are down on their luck but have rallied in recent weeks off a very low base.He told CNBC that they are hoping for better performance from gold going forward as well as a resurgence of funds going into the sector. Gold also surged 4.3 percent after the Federal Reserve announced that they would postpone the reduction of their large bond-buying program. The metal has gained nearly 3 percent this week overall and hit an all-time high at the end of the 2011. At this time, it was going for just over $1,900 per ounce, but has since stalled.
Despite this success, The Fed announcement is unlikely to boost the price of the yellow metal high enough to give the miners a sufficient spread between production costs and the price at which they can sell gold on the open market, according to The Street. Is the metal back on track to help business yet? We may just have to wait and see.
Since stalling out from its all-time in 2011, Gold selling accelerated in april of this year. This was due in large part to the fact that people were fearing that central banks were becoming less likely to contribute to stimulus measures. As a result, this has weakened currencies, additionally boosting gold as an inflation hedge. This week’s rally is a good opportunity to sell, while teh metal will average about $1,125 in the next year, as stated by Societe Generale SA in a statement to Bloomberg. However, Credit Suisse Group AG expects an average of $1,180.
As with the history of the market, it is hard to know whether to invest with these types of things or not and at what time. The world of business can often be difficult to figure out, but if gold continues to rise, this will be very good for business and investors.
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