Gold Climbs on News of Rate Hike Delay and Global Uncertainty

Once stocks seemed to rally recently, we’d begun to hear from the gold naysayers again. You’ve heard their familiar lament before: gold doesn’t pay interest or dividends; it just sits there and looks at you; it costs money to store. And so it goes.
 
Most of this calculated pessimism emanates from The Wall Street crowd. Their raison d’être is to move us in and out of stocks, pump and dump, and move right on. But weren’t they taken by surprise by the Labor Department’s June 3, 2016, jobs report! The nation added only 38,000 jobs. And wham – the shiny metal renewed its ascent.
 
Fed Chair Janet Yellen and the Federal Open Market Committee (FOMC) responded as most economists and analysts suspected they would. They eased off any rate hike for the time being. Once it became less inhibited from competition by interest-bearing investments, gold pierced its $1,300-per-ounce resistance mark.
 
Then, on profit taking, the yellow metal slipped briefly into the $1,280s. But make no mistake – gold now remains a deliberate and frequent choice of risk-averse investors fearful about the fate of their paper assets. As of this writing, it is hovering just below that $1,300 resistance mark at a spot price of $1,294 per ounce, after briefly touching an intra-day high of $1,297.
 
Since gold has already bypassed its $1,300 resistance, it remains poised like a coiled spring for its next flight upwards.
 
The uncertainty of the Brexit activity in the UK has also helped fuel the surging gold price. The issue will be decided by referendum on June 23rd when voters decide whether the UK should leave or remain in the European Union (EU). Two recent surveys have shown that the “leave” group remains ahead, although the campaign was suspended out of respect for British Member of Parliament Jo Cox, who was murdered the other day, presumably for sympathizing with the “remain” group in the controversy.
 
Most Brits are treating the Brexit issue as one of immigration. Membership in the EU requires a member country to honor immigrants from another member country if immigrants choose to work in the EU country of their choice. But the controversy is ultimately an economic one. Prime Minister David Cameron has argued that a Brexit will hobble the UK economy. After the surveys following the “leave” vote, the pound fell 1% against the euro and 1.7% against the dollar for the week. And, of course, the possibility of a successful Brexit amounted to a gain for gold.
 
The contraction of the Chinese economy has also played havoc with the global economy at large. It will take years for China to recover. Meanwhile the Chinese are trying to short-cut the process through the acquisition of foreign companies, particularly in the U.S. and Germany.
 
The International Monetary Fund and The World Bank, though, have revised their forecasts downward for global growth.
 
Clearly all of these developments provide a natural invitation for astute investors to protect their retirement funds through continual and disciplined investments in physical gold.
 
For more information, call 800-777-6177 now, and ask to speak to a Fortress Gold Group representative.

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