What happens when the main financial backer pulls out of a project? The answer is usually clear: The deal fails, which is what the foes of a gigantic gold and copper mine in Alaska are counting on. But in this case the mine has only been dealt a setback and is far from dead.
Gold prices recently have risen due to global central bank stimulus measures, but the true movement in the market stems from much more than QE3. Precious metals investors no doubt have seen the recent headlines coming out of South Africa.
Gold continues to hover near its 11 month high in dollar terms and near new records and the €1,400 level in euro terms. The lack of confidence over Spain’s finances has kept investors alert as they await a US jobless report on Friday.
The gold price hovered just below $1,700 per ounce Tuesday morning in London – over 4% up on its low last week – before easing ahead of US markets open as the US dollar regained some of the ground it lost on Monday.
Gold is one investment that you can park for the next 10 or 20 years. The punch line is this: gold and silver are not in bubble territory, and large gains remain, especially if monetary, fiscal, and fundamental supply-and-demand trends remain in play.
Gold and silver have extended their recovery and may be headed for the fourth day of gains due to the continuing European sovereign debt crisis, Chinese inflation and the risk that rising commodity prices bring inflation and stagflation.