The big switch: Gold now down and stocks trading up?
Posted By RichC on August 24, 2011
I sure would like it if I could accurately predict the volatile markets.
After opening down on the opening bell, the equity indices were up by the end of the day. This news is good for most long term investors and retirement plans, but not so good for those who have moved to precious metals in the last few days. For example, gold plunged below $1,800 and “gold futures ended the regular session down by $104, or 5.6%, at $1,757.30 an ounce for the most-active contract.” According to WSJ reporting, the “rising stock market and sudden doubts about whether the Federal Reserve would signal any fresh stimulus measures on Friday were the principal drivers behind Wednesday’s selloff.”
The Dow Jones Industrial Average gained 143.95 points, or 1.29%, to 11320.71. All but one of the Dow’s 30 components closed higher. The Standard & Poor’s 500-stock index gained 15.25 points, or 1.31%, to 1177.60. Financial and utility stocks registered the biggest gains in a broad rally. All 10 of the S&P 500’s sectors rose. The technology-heavy Nasdaq Composite rose 21.63 points, or 0.88%, to 2467.69.
The recent gains comes as investors hope Mr. Bernanke’s much-awaited speech on Friday will offer clues on how the central bank prepares to combat the slowing economy. That optimism may be fleeting, however, as the Fed hasn’t given signs that it’s ready to enact additional stimulative measures.
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