For a second day Gold has retracted further as the markets recover from a week of brutal trading that has the Dow back where it started on Monday. There has been a massive exodus from Gold as investors cover margins from losses on Wall Street. This combined with the hike in margins as mentioned here yesterday brings us to tremendous opportunities to acquire metals.
For the near term with the current retraction Gold will remain in an acquisition status. This should turn around in the next couple of weeks as more pressure will be placed on gold as a safe haven against the European & US debt crisis. Neither of these have been resolved and both will continue in keeping a drag in the economy.
Another pressure on gold is the long-term prognosis for continued unemployment in the 8% to 9% range. This will continue to keep consumers looking for safety as they fear losing jobs in an already tight job market. As a final note, inflation has continued to simmer on the back burner waiting to come into the forefront. This should bring gold back into the $1,800’s by the end of the month.