Gold may have lost favour, but its long-term prospects are excellent

 by Dave Levenstein, June 06 2014, 11:00


GOLD prices fell sharply last week as US equities soared despite a downward revision in US gross domestic product (GDP) that showed that the had economy contracted in the first quarter.
While gold prices plunged to a weekly low of $1,240, the S&P 500 pushed further into record territory and the Dow neared its best-ever mark. Under normal circumstances a decline in GDP growth would have an adverse effect on equities, but almost every time there is negative news, particularly in the US, the stock market moves higher.
According to data from the US Department of Commerce, the US economy declined by 1% in the first quarter.
"The downturn in the percent change in real GDP primarily reflected a downturn in exports, a larger decrease in private inventory investment, and downturns in nonresidential fixed investment and in state and local government spending that were partly offset by an upturn in federal government spending," the report said.
The results of the recent European Union (EU) parliamentary elections showed that many people are extremely discontented with a system of government that is directed from Brussels, in particular individuals in France and England.
http://www.bdlive.co.za/blogs/markets/2014/06/06/gold-may-have-lost-favour-but-its-long-term-prospects-are-excellent




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