Gold Prices Surge to Multi-Month Highs

After lagging year to date, the metal surges higher as Fed actions indicate weak economy.

Thanks to a combination of economic and trade uncertainty, potential weakness in the U.S. dollar, a dovish Fed, and moderate inflation, gold prices have been heading higher in recent weeks.

Gold prices closed last week over $1,340 per ounce, managing to hold their gains during a strong week of stock market performance.

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  • With rising expectations for the Fed to now cut interest rates later in the year, gold prices may rally further on perceived economic weakness.

    Gold prices peaked in 2011 over $1,900 per ounce on fears of potential inflation and a quick return to the Great Recession of 2007-2009. When that failed to materialize, prices plummeted. Since early 2016, however, when gold got as low as $1,050, prices have trended higher towards the $1,350 range they are at today.

    Action to take: Gold works as a hedge against market fears, political uncertainty, and unexpected bouts of inflation. As such, it always serves a role in any portfolio for diversification and hedging purposes.

    Acquiring and storing physical gold has a cost to it above the mere price of the metal, so traders may want to look at the SPDR Gold ETF, GLD, up to $130.00. GLD is designed to track the price of gold, but investors will not have access to the physical metal itself.