It’s certainly no secret: gold prices are fluctuating. As the value of gold is affected a variety of external factors, the precious metal’s trends become extremely difficult to predict. Nevertheless, recent events have clearly contributed to the current state of our currency.
For example, it appears that gold prices dropped significantly on Thursday, June 28th following the news that President Obama’s healthcare law, officially known as the Patient Protection and Affordable Care Act (or PPACA), was formally upheld by the Supreme Court of the United States as constitutional. Many provisions of the PPACA have already been in effect since its enactment as a law in 2010. The remaining provisions will continue to kick in year by year until it full activity, which is projected for 2020. The act’s central decree, the individual mandate, has been hotly contested by opponents of Obamacare and will require every non-exempted U.S. citizen to obtain health insurance by 2014 or pay an increasingly high tax imposed by Congress.
After the announcement, gold prices fell nearly $30 an ounce, as did the values of nearly every other such commodity. Experts say the healthcare overhaul threatens to limit many people’s disposable incomes. At a time when the economy is exceptionally shaky and growth is slow (and getting slower), these ramifications have investors nervous enough to place their stocks in more tangible currencies, like the U.S. dollar. With income becoming more limited, it stands to reason that Americans will prefer to save their funds for vital goods, rather than indulgences.
However, investors had something to be hopeful about when gold prices more than made up lost ground on Friday, spiking to $1,600 an ounce. The resurgence seemed to ensue in the wake of the two-day European Union summit, from which leaders emerged with concrete plans for the first time in months. The impending strategy revolves around the European Central Bank putting excess funding into several struggling economies, like Italy and Spain. In doing so, the Bank is relieving the sky-high interest rates on borrowed government money and rallying national banks that have been badly incapacitated by the economic downturn.
This news was greeted with much enthusiasm in the market, where improvements in the currency’s strength were already evident from the 2% rise of the euro against the dollar. Citizens of the 27 countries that make up the European Union can finally look ahead with hope in terms of their economies and finances.
The strength of commodities like gold has lifted to the massive relief of investors – especially after the last three months showed the metal’s largest fall in a single quarter since 2008. While this precious material will always remain a luxury desired by people worldwide, its future remains woefully unpredictable during this unstable time. Whatever happens, gold inevitably becomes wound up in every world event from economics to politics and beyond. If nothing else, it is an excellent measure of the strength of our respective nations. During times of upswing in the value of gold, check out CashForGoldUSA.com to get the best dollar value for your gold jewelry and other items!