Dow Jones Industrial Average is competing with gold in today’s growth

Dow Jones is growing together with gold prices

In brief: The increase of gold prices does not interfere bulls to pull Dow Jones Industrial Average up. The American stock market is rising against the background of mixed dynamics in the global stock market.

The stock market started the day with the U.S. fall. 40 minutes after the opening of trading bulls awoke and started a confident attack. Bears retired after the first breakthrough Dow Jones Industrial Average into positive zone. Dow Jones Industrial Average continues trading in the green zone. Now Dow Jones is 10,172.23 points. The index increased by +35.60 points (0.35%).

Growth of the U.S. stock market does not interfere with the gold. Gold increasing in price at the auction on Tuesday amid fears about the deepening crisis of sovereign debt in Europe. The August futures for gold in the course of trading on the New York Mercantile Exchange rose by 0,9% – to 1 226.5 dollars per troy ounce. “The fear factor is still present in the market, and increased attention of investors to gold due to its status as an asset of refuge, – told the news agency Bloomberg analyst at commodity markets LGT Capital Management Bayram Dinser. – Investors are likely to reduce investments in shares, which will make investments in gold an attractive alternative.” Market participants fear the rise of crisis tendencies in the economy of Europe, caused by high levels of public debt and budget deficits in several countries in the region. In addition, to overcome the debt crisis of tightening fiscal policy in these countries may, according to several analysts, lead to a slowdown in economic growth. Support prices for the precious metal had also forecasts the European Central Bank (ECB) on the banking sector.

The ECB has published on the eve of a report on financial stability, according to which the amount of write-offs for “bad” debts and assets in banks in the euro zone this year could grow to 90 billion euros in 2011 up 105 billion or even more, given “to increase the sovereign risk and possible indirect effects of fiscal consolidation. Comments ECB abruptly warmed up investor interest in investment in gold as an asset of refuge, Senior Vice President of MKS Finance SA Afshin Nabavi, whose opinions lead The Wall Street Journal. “We continue to see buying gold, caused by investment demand”, – said Nabavi. During the crisis in the economy of the gold is particularly popular with investors, who see it as a more reliable alternative to volatile currencies and subject to severe fluctuations in shares of companies. In most cases the gold in the period of instability in the global economy helps investors not only to preserve free cash flow, but also increase them.

Anrey Torbinski
2010-06-01 15:42, Economics.

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