Gold On the Way to End the Year at $1,000

In trading today, markets ended the day up on lighter than usual volume. The Dow led the day in real gains, adding on 0.50%. It gained 89.39 points and closed out the day at 17,918.15. The NASDAQ rose by 17.98 points and closed out the trading day at 5,145.13. The S&P 500 gained as well, adding 5.74 points to close the day at 2,109.79.

Markets were generally up in international trading. The one major exception was Japan’s Nikkei, which lost 391 points today. Hong Kong’s Hang Seng added nearly 200 points, while Australia’s ASX was up by 70 points. In Europe, the pattern of gains largely held.
England’s FTSE was up 22 points, Germany’s DAX added just under half of a point, and France’s CAC was up by 20. The sole European market loser was Switzerland, whose Swiss Market Index fell by 2 points.

Gold On the Way to End the Year at $1,000

The price of gold is down 2% this month and falling. After a brief respite in the middle of October, gold prices have resumed their downward trajectory. We’re absolutely in line to see gold at $1,000 per troy ounce by the end of the year. The reason that’s bad -- especially in today’s market -- is that, when gold was high, a lot of people put their retirements into gold-backed securities. If your money is stored in a gold-backed security and you’ll be needing it within the next few years, you could find yourself pulling out much less than you put in.

Most investors know that gold is a haven when markets are bad, but despite the rough waters things seem to be turning around for the economy. Jobs have been anemic but growing, and despite stagnant wages more people are finding work. Unemployment is at 4-year lows, and the market is inching back toward 18,000.

For years now, gold has been a smart bet but it looks like those days are coming to a close. Anyone with money in gold-backed securities should think about rolling it over to a more traditional account before the bleeding worsens. The exception is investors who won’t retire within the next 5 years, as there’s plenty of time for gold prices to rebound after that.

Gold-backed securities made huge inroads this last downturn, with every website and analyst touting the as a safe haven for your money. But the reality is that gold is on the downswing, and it will likely end the year right around $1,000 per troy ounce, a far cry from where it was in 2010.
Published on Nov 3, 2015
By Aaron Phillips
Aaron Phillips is a financial researcher and journalist based out of Michigan. He regularly writes the IG Daily and IG Weekly columns.

Copyrighted 2020. Content published with author's permission.

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