Gold Price Falls Over Fiscal Cliff
Since US officials are struggling to come to terms on our country's 2013 budget, $2,000 per troy ounce by year's end is no longer a consideration. The price of gold has fallen to the $1600's, which is gold's lowest level in months. It continues to decline as negotiations continue to flounder over our nation's budget. In the last few days alone, the price of gold has fallen over $70 an ounce amid early hints of a governmental standoff.
It's almost a certainty that the commodity will fall along with everything else. It will no doubt send markets into a frenzy that will generate countless casualties world-wide. And the one saving grace that world markets retreat to when all else becomes far too volitile, the American Dollar, will no longer be the last resort it has always been.
The US dollar is now and has been for quite a while - the absolute worst place in the world to invest one's portfolio - except for all the others.
Republicans and Democrats remain far apart on their budget proposals with just days left before the U.S. reaches the "fiscal cliff." That refers to automatic tax increases and governmental spending cuts which will mandatorily take effect on January 1st of 2013 should politicians fail to reach an agreement.
The slow pace of the talks have left many investors and traders uncertain about putting money into commodities. If the U.S. economy slows, it could cut demand for industrial metals, oil and other raw materials. Many traders sold their commodities to book profits while others are staying out of the market as they evaluate their portfolios ahead of year's end.
Many investors are looking ahead to Friday when the Labor Department will release employment data for November, which should offer more clues about the strength of the economy. Most commodities are currently experiencing various levels of downturn.
World financial markets indicate that it all comes down to our `fiscal cliff'. Everybody seems to be watching the US and for all practical purposes, our political leaders are still at a complete standstill. It may very well be that the GOP is simply posturing until the very last moment when they'll manuver all they can to take it on the chin as little as possible as they proceed to sign. Some fear that at the very last moment - just as they approach paper with pen - they may very well find something completely unsignable.