The United States economy is showing signs of continued strengthening under President Trump’s leadership. This is good news for the people who are searching for jobs or trying to sell real estate. The good news isn’t extending to the gold trading market. Investors are starting to see a rather troubling trend.
Gold Is Finally Reacting to the U.S. Dollar
Since President Trump took office in January, the U.S. economy has been inching upward. Until now, gold and silver haven’t shown much of a reaction to this strengthening. It seems as though the independent track of gold prices has come to an end.
Gold is currently on track to end in the red for four out of five of the most recent sessions. Market analysts note that this isn’t something that was unexpected. However, it does seem a bit odd that the precious metal would just now be adjusting to improvements in the economy.
Some Investors Are Wary
One issue plaguing the gold market now is that people who live in areas with a currency that is weaker than the U.S. dollar are opting to stay away from gold. This is leaving the market with more inventory than necessary to keep up with the demand. Generally, prices go down when there is more supply than demand.
As the U.S. dollar continues to strengthen, gold prices are likely to slip. What isn’t known is how much they will slip. The U.S. dollar is up .2 percent at noon EST on Monday, April 3, 2017. Gold prices aren’t expected to exceed $1,260 per ounce, according to futures outlook for this year. As of now, June gold is priced at $1,249.30. This does leave some room for growth.
To Buy, Sell or Hold Tight?
Watching gold prices can help investors decide when to add more gold to a portfolio. Making the investment in the valley of the price curves can help to maximize potential profits.
People who want to get out of gold should probably hold tight until gold shows another upswing. Of course, some investors might be able to sell for a profit now. Gold prices had plummeted to $1,224.30 on December 15, 2016. Investors who grabbed gold then might choose to bid adieu to holdings as soon as gold prices start to inch upward.
Of course, nothing is certain in the gold market so think carefully before you make any decisions about the precious metal.
