Gold falls, stocks rise as traders take profits
August 23rd, 2011
New York, NY, United States (AHN) – U.S. stocks gained Monday in morning trading as mergers and acquisitions led markets higher. Gold prices fell as traders continued to take profits and turned their attention from the precious metal to more risk, buying beaten-down and battered stocks.
Shorty before noon, gold prices were off about $23, bid at $1,739.70 an ounce. Minor liquidations have led the yellow metal lower following last week’s impressive gains and a new high of $1,813.79.
While some analysts see a modest retracement in gold as a short-term appetite for global stocks emerge, the story remains the same for the precious metal. Bullish sentiment for the commodity remains intact and strong. Any pullback in gold is seen as temporary.
U.S. and global concerns continue to be a drag on the worldwide economy and many investors remain cautious, if not downright bearish. As always, gold bugs will be carefully watching U.S. economic data for any signs of weakening in the economy, and they stand ready to pounce on gold following subtle or obvious sluggish activity, which could push gold prices higher.
The Chicago Mercantile Exchange raised margin requirements to trade 100-ounce gold futures by 22 percent last week, putting pressure on gold and traders. Many still believe gold has much further to run. Commodity analysts at JP Morgan have predicted gold may trade near or above $2,500 an ounce by year’s end.
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Categories: Financial Stocks
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