Conrad Strauss: Global economy and better prospects for the U.S. dollar combine to dim gold’s appeal.
Conrad Strauss reportedly discussed recent market moves with investors. European stocks gained after being lifted by banks and miners, as investors awaited a key bond auction in Italy. The British FTSE 100 and the French CAC had little movement and Germanys Dax was up slightly. The upbeat sentiment across Europe was inspired by successful Spanish and Italian auctions, where high demand for the nations’ debt eased worries over the European crisis.
Italy is due to sell an additional amount later and the demand and yield will serve as a gauge for investors’ confidence in the euro zone’s third-largest economy. Investors on Wall Street and in Asia were also encouraged by developments in the euro zone with The NASDAQ Composite marking its longest winning streak in six months and mining companies adding to gains in Europe.
Conrad Strauss apparently spoke to investors on re-emerging trends. Investors who have jumped on the gold bandwagon are expected to need plenty of patience this year, as the global economy and better prospects for the U.S. dollar combine to dim gold’s appeal. While buyers are likely to see their gold holdings rise in value and any advance is expected to be more modest than in recent years.
Muted returns from gold would test short-term traders. Yet those who own gold as a long-term answer to currency concerns and for portfolio diversification could find their patience is rewarded. Investing in gold-related companies is also a re-emerging trend. The absence of catalysts to drive buyers to gold is affecting both demand and price. Large and small investors alike have cut gold positions over the past year and European headlines are still impacting gold futures but increasingly the metal has traded on U.S. dollar moves. The continued lack of confidence in Europe is dampening many investors’ outlooks on market movements stopping profits that should be being made. Returns are actively been seen by those investors that use facts not market sentiments to make profits.