Gold Going Bear
Gold has historically been a “safe” investment for investors during troubled times in the economy but this has not held true recently. The investment bank Goldman Sachs announced today that “gold’s prospects for the year have eroded, recommending investors close out long positions and initiate bearish bets, or shorts.” The last 6 months have shown a 12% decline in the price of gold, a trend Goldman predicts will continue throughout the second half of 2013. Portfolio management company Windham Financial Investments, reduced its holdings in gold from 15% down to zero in February.
A bear market is defined as a 20% drop or more from a peak so this precious metal has not yet been categorized as bear. Circumstances may change at any time due to the volatility of the market although gold’s consistent increase in value these past 12 years is something which cannot be overlooked. It is unlikely however that the price of gold will rebound after the weak U.S. job report last month and the new economic stimulus package in Japan.
The Wall Street Journal