When I wrote a post on 24 September on “More bad news”, Gold had sufferred a 5.9 per cent drop to US$ 1,639 per oz. As of today, Gold was last traded at US$ 1,593, drop of 2.8 per cent over two month-period.
Before August, analysts and investors were bullish about Gold since it is a commodity used as a hedge against inflation and inflation was a major problem for Asian countries including China. Some analysts were even more bullish and predicted Gold would hit above US$ 2,000 by the end of this year. The year is coming to an end. I cannot see that this can ever happen.
Assuming, an investor bought Gold at a high of US$ 1,900, he would be sitting on a paper loss of 16 per cent. So much for the optimism on Gold.
In a poor sentiment market environment like now, it is brave for investors to take a stand and invest in Gold at current prices. For that matter, any kind of investment is volatile, including Gold. Until we see global economy rising rapidly which is unlikely in 2012, we will not be able to see a sustained rise in Gold prices.
Copyright © 2011, limkimtong for Living Investment
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