This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Bargain Hunters Buy Gold, Prices Volatile

NEW YORK (TheStreet) -- Gold prices Wednesday were volatile as bargain hunters bought gold at discount prices after an earlier sell-off.

Gold Prices Will Recover

Gold for June delivery was adding $5.60 to $1,174.80 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Wednesday has traded as high as $1,177 and as low as $1,156.20. The U.S. dollar index was giving up some of its gains and rising only 0.62% to $83.82 while the euro continued its slump falling 0.83% against the dollar. The spot gold price was up over $2, according to Kitco's gold index.

The euro plummeted past its one-year low of $1.30 as European sovereign debt fears plagued the market. Despite the IMF/European Union's joint 110 billion euro bailout for Greece, investors panicked as the debt crisis threatened to spread to Spain and Portugal and three were found dead after a series of protests in Greece. Markets nosedived Tuesday with the Dow Jones Industrial Average falling over 200 points as investors sold their gold to raise cash.

Gold prices had been slipping earlier Wednesday but bargain-hunters came out in full force and bought the precious metal after gold's selloff. Gold is an appealing investment during times of financial crisis and currency debasement as a form of money that doesn't lose value. Analysts expect gold's tug of war to continue tempering gold's run to $1,200 an ounce. Prices will be torn between investors' need for cash and bargain hunting, profit-taking and good buying opportunities.

"A slight recovery ensued in the first half-hour of trading and observers were on the lookout for possible bargain-hunters to make an appearance," says Jon Nadler, senior analyst at in his daily metals report. But a stronger U.S. dollar hurt gold's appeal as the metal became more expensive to buy in other currencies. "Gold [is] ... fighting for its credibility as a safe-haven asset," argues Nadler, "and was seen as once again being grouped with risk assets and sold in favor of the U.S. dollar," which is perceived to be the strongest global currency.

Portugal looks to be the next eurozone country on the chopping block with its debt levels reaching 77% of gross domestic product which is still a far cry from Greece's debt, which is 115% of GDP. Moody's announced that it will put Portugal's double A credit rating under review which prompted more speculation that Portugal is the next European country at risk for default. However, Portugal's 10-year bonds are currently yielding 5.7%. At the height of Greece's economic crisis bond yields soared over 10%, so for now investors are still willing to lend money to other struggling eurozone countries.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
GLD $122.96 -0.23%
ABX $18.38 -3.82%
AUY $4.55 -3.40%
FCX $12.01 -11.37%
GG $19.13 -1.90%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs