Last week gold rose above $1000 and the financial commentators let out a big "uh-oh." Gold has risen above $1000 a few times recently and each time it's been tied to insecurity in the market and concerns over the dollar. This is because gold is seen as a safe-haven and traders often hedge their exposure to the stock market sending gold soaring.
For example the commodity hit a record high in March of 2008 when all the Bear Sterns hoopla was happening. This past February it nearly hit $1000 again when trouble hit the big banks.
So the recent spike begs the question; do gold traders know something we don't know?
All in all, the economy seems to be on the mend. Fed Chairman Ben Bernanke came out Tuesday saying "From a technical perspective, the recession is very likely over at this point." Of course he cautioned that with the unemployment rate nearing 10%, the pain caused by the recession isn't over at all and job insecurity may continue to contribute to a sluggish economy.
But despite that he seems confident that the worst is over. So what's with the gold spike?
I have to mention that this recent spike in gold prices happens to coincide with Zecco Trading's much anticipated launch of gold and silver trading with Zecco Forex. Talk about fortuitous timing!
The platform allows up to 100:1 leverage on spot gold and silver, for both long and short positions. It trades 24 hours a day, 5 days per week. Of course, as Lehman Brothers might have told you, leverage tends to magnify gains as well as losses, so be careful out there.
So I ask you: are you planning to trade gold or silver? If so, will you use ETFs, the Zecco Forex platform, or will you hide bars of the stuff under your bed? Or conversely, do you take comfort in Bernanke's words and believe the worst is at long last finally over?
Give me your thoughts in the comments below!
Forex trading involves significant risk of loss and is not suitable for all investors. Increasing leverage increases risk. Spot gold and silver contracts are not subject to regulation under the U.S. Commodity Exchange Act.
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