Sunshine Profits

All the fundamental factors that have made gold such a stellar investment for the last decade are still intact.

Let’s start by stating that the title of this essay refers to the current situation on the gold market – not to the long-term fundamental picture.

Today’s market session is very volatile, not only in case of euro, dollar and stock indices, but also in case of precious metals.

Gold prices fell last Tuesday for the first time in eight days and Wednesday gold fell below $1,600 an ounce as buyers stayed on the sidelines ahead of the meeting of the U.S. Federal Reserve which announced Wednesday a modest increase in its efforts to reduce borrowing costs for businesses and consumers.

Greeks voted to stay in the European Union with a narrow victory for the center-right New Democracy party.

We have all seen the newspapers headlines about the troubles in Greece, Spain, Portugal, Ireland and the entire eurozone.

The reasons for the gold’s decline given in the press were a case of “round up the usual suspects.”

There is all the talk of Greece leaving the eurozone and we are already seeing a slow-motion runs on Greek banks.

Gold, traditionally a safe-haven asset, has been moving in tandem with riskier assets such as equities, industrial metals and oil this year, as investors for some reason which is difficult to fathom, have turned to the supposed “safety” of the dollar.

All eyes are on Greece which is heading toward national elections six weeks after the last vote