As The Dollar Strengthens Gold Coin Prices Drop, Learn Why Directly At GoldCoin.net

February 25, 2010 – Gold coin prices dropped yesterday as economic news strengthened the US dollar. Gold prices dipped to a two-week low in London as the dollar neared a nine-month high on hopeful testimony by Federal Reserve Chairman Ben Bernanke and the lack of a Greek recovery plan by the European Union. Gold prices started today at $1,098.20, down for the fourth consecutive day as news was seen to favor the dollar.

Analysts see the correlation between the current news and gold prices. The “lower gold price is dictated by the weakness in the euro,” said Bayram Dincer, a commodity analyst at LGT Capital Management in Pfaeffikon, Switzerland.” With Bernanke’s announcement about not raising interest rates in the short term and the lack of a Greek plan, many investors are becoming adverse to risk, which currently favors the dollar.

Although the dollar continues to benefit from events in both Europe and the United States; the gains may be temporary. The US Dollar Index is up again today, rising 0.178 to stand at 80.96, but as a direction is taken in Greece and the US economic problems return to the news, gold will have corrected and be ready to rise while the dollar falls.

With the prices dipping, investors should consider increasing their holdings of gold coins and other forms of gold. “Investor money looking for safe assets should be the factor,” said Tetsuya Yoshii, vice president for derivative products with Mizuho Corporate Bank Ltd. This search for safe investments will return to gold as the news shifts back to the US economy, impacting the strength of the dollar. 

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Kevin Johnson

Senior Staff Writer - GoldCoin.net