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

Gold Primed To Gain If Budget Talks Fail: Analyst


NEW YORK (AP) â¿¿ Gold will probably surge, along with the dollar, should U.S. lawmakers fail to reach a deal on reducing the U.S. budget deficit, an analyst has forecast.

Typically, gold and the dollar move in opposite directions. When the dollar falls in value, holders of gold demand more of the currency in exchange for the precious metal. However, that relationship breaks down in times of extreme crisis, says Nicholas Brooks, head of research and investment strategy at ETF Securities in London.

As politicians in Washington haggled over the debt ceiling last summer, investors bought both Treasury securities, pushing up the value of the dollar, and gold. That surge in demand pushed gold prices higher, with the metal climbing to a record close $1,900 an ounce, after Standard & Poor's cut its rating on the U.S. government's debt in August.

"We could see a similar pattern now if people lose faith in the U.S. to responsibly deal with its fiscal balances," said Brooks, speaking at a conference in New York Thursday.

The White House and Congress are currently locked in talks to avoid pushing the U.S. over the "fiscal cliff." The sharp cuts in government spending and tax increases that are scheduled to be implemented in Jan. 1 should no budget agreement be reached, could, economists say, push the U.S. back into recession.

Gold edged up $10.70 Thursday to settle at $1,727.20 an ounce. The metal has gained 10 percent this year, and climbed as high as $1,792 Oct. 4.
Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%
YHOO $36.60 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs