Have Gold Prices gone into a Slump?

A 250 kilogram gold bar.

In December 2010 gold prices hit an all-time high of $1432.50 in New York, but by January 14, 2011 the price of gold had sunk to $1361.80 per ounce, a decrease of almost 5 percent. Right now gold prices are in this slump that coincides with the expectations of many investors that the economy is slowly recovering in the United States and the European Union. The question is now being asked is, are investors gaining more confidence in the economy by taking their money out of gold and putting it into more speculative ventures. The other question they are asking themselves is this only a small correction or does it indicate a continuing upward trend in the economy?

According to Bloomberg during the second week of January 2011 the price of gold fell on the New York Stock Exchange to its lowest settlement price in seven weeks. This was fueled by speculation that the leaders of the European Union would stabilize economy thereby ending the appeal of gold as a safe haven.

One economist, Dennis Gartman, was quoted as saying that the price of gold was now “toppy” recommending that investors cut their holdings by about one third saying that “Gold has run its course for a while.”

Right now gold and silver may not be the best investment in the world, but in the long run the price for both of these metals looks bright it is expected to rise to even higher levels. Many producers of gold expect to see the price topped $2000 per ounce.