With Ukraine on the brink of civil war, gold prices have been pushed back over the $1300 threshold and is likely to continue the upward trend this week. Ordinarily, the value of precious metals should be falling to attractive consumer prices, but with clashes in Odessa between Ukraine forces and pro-Moscow militants traders have obvious concerns trading in equities.
Not even Friday’s upbeat economic data from the US could persuade stock market dealers to turn their back on safe haven commodities. News of escalating violence in the Ukraine on Friday was met with a massive investment in gold which saw the spot charts spike by $19.50 for the day.
Traders have been spooked by the geopolitical tensions and made the decision to cover their investments with gold before the week’s trading came to a close in case the Ukraine crisis spilled over during the weekend. Although pro-Russian protestors were released on Sunday, the risk of civil war remains a significant threat to the value of stocks.
Worrying economic indicators
The Ukraine crisis is not the only negative issue that could force gold prices up this week – technical indicators are concerning some investment bankers. The non-farm jobs data released on Friday was better than expected, and with a 0.4% drop in unemployment the economic future raises hopes, although some analysts are not convinced the Government’s report leaves an accurate impression.
The non-farm payroll (NFP) is a yardstick that measures the US economy, and despite better than expected results for April there is a concern that recovery is “stuck in the mud” and the US economy is not growing quick enough to create a sufficient amount of jobs.
Analysts also point towards three other key indicators they believe will bring the bull market to an end – and the stock markets to come crashing down. Such an event will see gold prices rise sharply and offer investors of precious metals a great ROI – providing you invest at the right time.
Economic collapse inevitable
The S&P 500 is not far short from hitting all-time highs, but there are fears that the increase in value was too quick and a correction is needed. The last tie equities performed this well in 2011, the 150-day moving average dropped by 21.58%. Looking at the technical indicators, investors are teetering on the same crevice today.
Historically, when the markets are trading at a high range it tends to stall and move sideways, but when now we are coming off the tail-end of a five year bull run which has enjoyed a 300% increase in equities, the correction is at dangerous levels and could fall sharply. US-backed funds does not look a good buy right now.
A weakness in the housing sector is another indicator the stock market is about to collapse. Furthermore, a correction is needed to restore equilibrium to the markets and reassure traders the system is working as it is supposed to.
Consumers are urged to purchase wisely, and precious metals offer a sensible investment with the prospect of healthy long-term gains. For the latest deals on gold bullion products head over to coininveestdirect.com today and make sure you protect the interests of your financial future.