Gold Stocks and Gold Prices Drop After Hitting 28 Year Highs

After gold prices soared to a 28 year high at $755.70, they are now easing off slightly, with gold bullion trading in New York at $722.90 at the moment and lower on the gold futures market as well.

Since August, gold prices have gained over $100 mainly because of weakness in the US dollar, which tends to move in the opposite direction to gold.

Gold analyst Sam Kirtley of The Gold Prices Newsletter believes that although a correction is due, gold and gold stocks are set to rise even higher very soon:

“We felt the gold was overbought and signalled to our subscribers to take profits when gold was at at around $740 and the HUI (an index of un-hedged gold stocks) was near 400. Looking back, we signalled at sell less than 1% from the recent peak in the HUI, so we appear to have made a good decision there. We fully intend to purchase our gold stocks back after this correction as we believe gold is heading to an all time high, above $850, in the very near future and will go to near $3000/ounce in the long term.”

Many gold stocks have also been making new highs fuelled by the higher gold prices and a weaker US dollar.

Do you think gold and gold stocks are a good investment at the moment?

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