Quick Take: Gold May Have Bottomed
NEW YORK (TheStreet) -- Although gold price fluctuations have been crazier than ever, have we finally witnessed a bottom? Here with his take is Savneet Singh, co-founder of Gold Bullion International, alongside TheStreet's Gregg Greenberg.
Gold began to move higher after yesterday's FOMC minutes and we are seeing a continuation of that move today. The driver? Dovish comments from Federal Reserve Chairman Ben Bernanke, who also said that interest rates would not be rising anytime soon.
So after the wild run in gold, where the yellow metal ran upwards of $1,900 per ounce before cratering to sub-$1,200 levels in June, did it finally hit rock bottom?
According to Singh, it might have. The violent downward move flushed out a lot of speculative investors in gold, leaving only natural, fundamental buyers at these levels.He added that 80% of gold purchases occur outside the U.S. He cites emerging-market growth and emerging wealth from Asia as the primary drivers for gold going forward. So although the precious metal does appear to trade like a stock, it actually has many fundamental components behind it. Even though it feels like everyone on Wall Street has turned his or her back on gold, Singh said he is seeing larger inflows than ever before. This would indicate that people are recognizing the value in gold and buying it with the plan of holding it over the long term. -- Written by Bret Kenwell in Petoskey, Mich. . Follow @BretKenwell
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