Gold Fails to Shine Despite Global Economic Crisis

Gold Fails to Shine Despite Global Economic Crisis

Newly pricey precious metals aren't just drawing investor interest. They're luring the unscrupulous players who always rush in when the easy bucks beckon.

Associated Press
by: Stevenson Jacobs
Nov. 3, 2008

NEW YORK - For years, investors known as gold bugs snapped up the metal and socked it away, betting that a colossal economic crisis would one day slam financial markets and send gold prices through the roof.

For many investors, that grim scenario is in full swing, except for one thing: After briefly hitting $1,000 an ounce for the first time in March, gold has fallen into a rut and shows no sign of budging anytime soon.

Still, not everyone is selling gold.

Mark Albarian, CEO of Goldline International, Inc., a Santa Monica, Calif.-based gold dealer, said sales at his firm tripled in October compared to August -- a sign that individual investors aren't joining hedge funds in the rush to sell gold.

"Our clients overall seem to be very happy with their gold," Albarian said, noting that gold is still outperforming most assets. "Gold may be back down to where it was last year. But our houses have dropped 10 to 30 percent during that time and stocks are way down. So gold has held up rather well."

Looking ahead, some gold watchers are betting for another big climb. They argue the dollar's recent rally can't last as long as the government has to pay for a string of mammoth financial bailouts by either printing money or raising taxes - both inflationary weights that should weigh on the greenback and be bullish for gold.

The above information has been redacted from the article as it originally appeared as
syndicated by
The Associated Press.

Release Date: 
Monday, November 3, 2008