Gold prices are erratic but up around $900
Fund managers are seeking gold at safe-haven investment
By Tom Stundza -- Purchasing, 4/29/2009 3:34:00 PM
Spot gold prices are averaging $894/troy ounce this month, down from $943 in March. However, the prices of gold futures rose Wednesday morning for the first New York Mercantile Exchange trading session in three days, climbing to between $895 and $900/troy ounce as a declining dollar and a worse-than-expected gross domestic product report increased gold's investment appeal.
Gold for June delivery closed at $894 on the Nymex on Tuesday as fears of a global swine flu pandemic had rattled metals commodities markets. An Associated Press report says that’s because speculators feared a major outbreak of the swine flu prolonging the global recession and depressing demand for basic materials.
Evidence of soft demand in India during the country's festival season, a traditional time of gold-buying for gifts and investment, is also hurting gold prices, analysts say. India is one of the world's biggest gold consumers.
However, there are a lot of investment fund managers who buy gold as a safe haven against any economic decline who want the metal to stay elevated, says Frank Lesh, broker and futures analyst with Future Path Trading in Chicago. “There are a lot of people who want the market to hold $900,” he says. And that has resulted in several differing forecasts for pricing, though all forecast higher prices.
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