European Weakness Spurs Investors to Trade Gold
Yesterday we talked about some of the advantages of investing in penny stocks. We showed you how small cap stocks are outperforming both the Dow and the S&P 500 over the past year and change.
In gold trading prices broke $1250 an ounce. We have seen it cruise to an all time high today. Investors are overwhelmed with fear. The Euro got destroyed yesterday and is current sitting at 1.19 vs. the U.S. Dollar. The Euro hit a 4 year low yesterday of $1.18.
When the world is in financial turmoil and currencies are diminishing, gold becomes a safe haven for investors. A massive spike in gold prices, like we saw on Monday, represents a world wide panic in the markets.
Traders and hedge funds are swarming into gold. Spot prices are starting to move rapidly. Many retail investors are also jumping into gold because the feel like they could miss the next leg up.
Gold stocks are moving modestly and we have seen several penny stocks surge over a 100% for the day today.
While gold stocks are usually good stocks to buy and a much safer investment, penny stocks offer a little more volatility.
You are not going to see gold stocks up huge when the price of gold spikes. What moves gold stocks north is news. Mainly new discoveries, drilling results and acquisitions.
News is what also moves small cap stocks. Generally penny stocks do not move with the market although general market conditions do have an impact on how much someone is willing to risk.
Later this week we are going to have some penny stock picks posted on the site. Keep checking back later this week for some more stock research!
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