Wall Street Reopens and Gold Jumps Immediately

Wednesday, 31 October 2012
Written by 
Published in Gold Investing

On the heels of one of the worst hurricanes in some time, Wall Street was finally able to open back up. As expected, gold jumped immediately, welcoming back traders and investors as over 6 million people try to get their normal lives back on track after the super storm.

Hurricane Sandy recently swept through the east coast, causing major damage and shutting down thousands of businesses, as well as leaving millions without power. The hurricane was devastating enough that it even caused the east coast markets to shut down for the last couple of days. However, Wall Street was up and running again today, and gold responded, jumping double digits for the first time in almost two-weeks.

First-Strike

Gold for December delivery GCZ2 +0.49% was up double digits to come in at $13.40, or 0.8%, to $1,725.70 an ounce on the Comex division of the New York Mercantile Exchange. This was both a great way to open the market back up, as well as a much-needed jump in the price of the yellow metal after it had dropped considerably over the last couple of weeks.

It felt good to be back to open trading, and while gold did respond with a nice double digit boost, the fact of the matter is that there are a couple of underlying issues that the yellow metal will have to face after the excitement of the east coast market reopening subsides.

There are of course the issues in Europe that are once again spinning their ugly head around. A fast bailout for Greece was on the table, but there were a couple of nations at odds over the structure, so that is in somewhat of a limbo while they figure out how to come to a compromise. Another issue facing gold is the fact that the current bailout program that was put in place by the Feds several weeks ago is starting to lose its luster. While the Feds will keep it in place, along with keeping interest rates low, this most current stimulus package is proving a point I have been driving home for some time now; these packages only work as a temporary fix.

While it remains to be seen what will happen in the long run with the current stimulus in place, right now we are seeing a roller coaster of emotions from traders and investors. The stimulus was able to drive gold prices to the brink of the $1,800 per ounce price mark before the yellow metal had a positive pullback and corrected itself.

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Jeremy Holcombe

Jeremy is a seasoned finance writer who has been studying the gold and silver industry for many years. His vast knowledge in the precious metals sector led him to Goldco Direct, where he is now one of their most recognized writers both on the site and around the web. Along with being a senior Precious Metals writer for Goldco Direct, he is frequently featured on many financial sites on the internet where they tap into his knowledge about gold. Jeremy is passionate about educating investors about the yellow metal as its price continues to rise to record breaking levels.