NEW YORK (TheStreet) -- Gold prices had a disastrous 2013, but 2014 started off with the yellow metal up $20 per ounce and closing above the key $1,200 level. TheStreet's Joe Deaux spoke to Miguel Perez-Santalla, vice president of business development at BullionVault.
Some market argue jobless claims came in lower than expected, which may indicate a negative sign of things to come and prompting gold to rally on Thursday, Perez-Santalla said. However, he disagrees and thinks gold's move higher is because prices are cheap. Investors saw gold below $1,200 and decided to snatch it up while they could, he said.
Deaux asked the question many investors have likely been wondering: How long will the $1,200 level last as support?
According to Perez-Santalla, it should hold for "quite a long time." He said it costs miners roughly $1,100 per ounce to mine gold, meaning there is a reasonable $100 premium built into current gold prices. For this reason, he believes $1,200 will continue to hold as support.Although the Federal Reserve has begun tapering its asset purchasing program, there is still a sizable quantitative easing program instilled in the Fed's current monetary policy. Coupled with the uncertainties regarding the Affordable Care Act's effect on the U.S. economy, Perez-Santalla concluded that investors should continue to view gold as a "safe haven" asset. -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV