The U.S. dollar‚??s 10% drop in value so far in 2017 and investor concerns that the stock market is running out of steam helped lift gold above $1,300 an ounce for the first time this year on Aug. 18, before the precious metal pulled back about $15 an ounce amid apparent profit-taking, said Rich Checkan, president of Rockville, Maryland-based Asset Strategies International.
Investors interested in buying gold or especially gold coins should not be deterred by the market‚??s intraday retreat from $1,300, since the same causes that led the yellow metal to cross the $1,300 threshold remain intact, Checkan said. The U.S. dollar still is weakening and thereby losing purchasing power, while gold is an alternative asset that should hold its value or appreciate in response, he added.
A catalyst for the price of gold each August, September and October is the ‚??love trade,‚?Ě which Checkan said coincides with pre-holiday gift buying. Another factor pushing up the value of gold is the ‚??fear trade,‚?Ě which is driven by public threats against the United States from North Korea‚??s dictator, continuing terrorist acts and other geopolitical uncertainties, he added.
Plus, a weakened dollar reduces the price of U.S. goods to foreign buyers and aids American exports.
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Paul Dykewicz is the editorial director of Eagle Financial Publications, editor of StockInvestor.com and DividendInvestor, a columnist for Townhall and Townhall Finance, a commentator and the author of an inspirational book, ‚??Holy Smokes! Golden Guidance from Notre Dame‚??s Championship Chaplain,‚?Ě with a Foreword by legendary football coach Lou Holtz. Visit Paul‚??s website at www.holysmokesbook.com and follow him on Twitter @PaulDykewicz.