It was a good week for gold bugs -they know a good price when they see one. Gold prices plunged early in the week to test a major long-term price support floor. And, just like in June 2013 and January 2014, investors snapped up the yellow metal at a furious pace as the drop to the $1,182 per ounce level was perceived as a good level to buy.
Investment demand will continue to be a long-term driver and support for the gold market in the months and years ahead. Longer-term investors bide their time and wait for good buying opportunities to enter the market to buy, and to build their gold holdings…
Overall investment demand has been off in 2014 as U.S. investors are finally beginning to shake off the repercussions of the 2008-2009 global financial crisis. But, despite moderate improvement in the U.S. economy, there remain significant concerns about Europe’s growth prospects and Japan’s. China’s overall growth picture is slowing as well.
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Chart courtesy of Kitco.