Gold Soars Beyond $1,400/oz.

gold_pile_RB_whiteThe gold market is set for its highest close in more than two weeks, currently at around $1,413/oz.

Weakness in the dollar and in U.S. economic data, as well as an increase in Asian gold holdings, supported the price of gold today.

The tug-of-war between physical and paper gold continues, but physical appears to be winning. In China, India and Singapore, demand for physical gold has more than offset outflows from exchange-traded funds.

According to the founder of GoldForecaster.com “once the sales from the SPDR Gold ETF ceased, the weight of Asian demand would turn the gold price around.”

“If there are no more sales to come, then the record short position on Comex will prove a driving force to send the gold price higher as these shorts are closed and as the major banks and hedge funds go into the market to buy their gold back,” he added.

Also adding to gold’s good day was yet another sharp drop in the Japanese Nikkei Stock Average (down 5.2% overnight) and disappointing U.S. GDP data. Unemployment claims were also higher in the U.S. than expected.

Weak economic data signals the Federal Reserve should continue its quantitative easing program, which devalues the dollar.

What this means for you: The U.S. economy remains weak while gold demand is on a record pace.

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