Stocks climb as gold falls

13th April 2013 No Comments

gold stocksIt was a mixed week for investors, as the Dow Jones, S&P 500, and Nasdaq each climbed between 2.1 and 2.8%, but gold fell 5% in the process.

According to CNN, the Dow Jones shot up by 2.1%, the S&P 500 by 2.3%, and the Nasdaq ascended by 2.8%, presenting strong numbers and encouragement for investors in all three cases. At the same time, experts agree that there is no one cause for the recent upswing, although many investors don’t particularly care as long as they enjoy the fruits of the increases.

The news was not all on the positive side of things, though, as CNN’s The Buzz also reported that gold plunged by 5% to a price below $1,500 during a disastrous week for the commodity. The price hit below $1,500 per ounce in a manner that seems to coincide sharply with the increase of stock prices.

As the economy has started its long recovery, gold has started to dip, which is common as gold often does better in scarier times. Inflation can also lead to increased prices, but though experts see inflation coming after some of the Fed’s decisions lately, it won’t happen anytime in the near future.

Colorful billionaire Warren Buffett has been a proponent of stocks over minerals such as gold over the years, saying that gold is simply an asset that does nothing, while companies can actually produce more value since they are dynamic entities.

All of this has served to solidify gold’s reputation as a decent hedge in one’s portfolio, but nothing near a cornerstone to really build upon. While it’s hard to say exactly what we can take away in the long term from this week’s victories on the stock market, it’s certainly a good time to be an investor in stocks and for now, we’ll take what we can get and be happy with that.

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