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Gold Bullion and The US Economy

June 1, 2012 - Leaving aside the many problems plaguing Europe for the moment, the most recent economic data out of the United States is troubling enough for investors to retake positions in gold bullion that is literally affecting the price during the most protracted correctional period we’ve experienced in some time.

The spot price of gold rose 3.2 percent during intraday trading, breaching the psychologically important $1600 per troy ounce level and reached as high as $1610.20 per troy ounce. In an intraday move 3 percent is significant in any commodity and it should serve as an indicator of the severity of the economic data that is arising now from the euro zone and also from the United States. Silver showed a 2.71 percent gain and is bidding again above the $28 dollar level, now at $28.46 an ounce.

The main reason given for this price moves, which are very significant in intraday trading, have to do with the recent jobs report released by the Bureau of Labor Statistics which places the job creation rate at the month of May at a stall pace. During the month of May only 69000 jobs were added to the US economy. This raise the unemployment rate to 8.2 percent, the first increase in unemployment in almost a year.

This is a far cry from the jobless report released in the month of February, which added 200,000 jobs to the US economy was largely regarded as a signal to both market participants and American workers that the US economy had turned a corner. We are now getting the kind of indication that is taken very seriously by investors that we have not turned any corners in the US economy and that we can expect difficult market conditions to persist in the future.

As such, gold and silver bullion are already performing well in the adverse economic conditions and promise to continue as the best hedge we have against the difficult markets. Gold bullion has been on a stunning streak the past three years particularly which coincides with the many problems both in the US economy and abroad and that trend should be reinforced by the current market difficulties.

Daily Updates Archive

Jonathan Monroe

Senior Staff Writer - Gold-Bullion.org

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