By Jeff Clark
Depite a few short-term fixes, there remains no real resolution to the sovereign debt issues in many European countries. We're certainly not spending less money here in the US, and now we're bailing out Europe via currency swaps with the European Central Bank. So shouldn't Gold Prices be rising?
Yes, but nothing happens in a vacuum. There are some simple explanations as to why Gold Prices remain in a funk.
-The MF Global bankruptcy, the seventh-largest in US history, forced a high degree of liquidation of commodities futures contracts, including gold. Many institutional investors had to sell whether they wanted to or not. This is similar to why big declines in the stock market can force funds and other large investors to sell some gold to raise cash for margin calls or meet redemption requests.
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