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Tag: dollar

  • Gold Prices Could Plummet As Dollar Strengthens

    Next week promises to be a very stressful time for those keeping tabs on world currencies, especially for Western observers.

    The sterling pound is already fluctuating ahead of Scotland’s referendum, which could decide if the country will leave the United Kingdom.

    Eyes are also on the American dollar. The US currency is expected to strengthen as interest rates go up.

    But while a stronger dollar is great news for the United States, its success is causing problems for gold investors.

    The news that the dollar is gaining steam brings with it the expectation that the value of gold will drop.

    Commerzbank Corporates & Markets reportedly said this in a statement to clients:

    The price of gold [is] under pressure. […] Should the Fed actually signal an imminent rate cut next week by changing its communiqué and consequently give additional tailwind to the US dollar, this should put further pressure on the gold price.

    With gold trending down, one has to wonder whether or not the “buy gold” craze of the recession years is finally over.

    For the longest time there was a strong belief that the American economy could not recover and the dollar was doomed.

    It was almost taken for fact that the best thing Americans could do to protect themselves was invest in as much gold as possible.

    The panic appears to have subsided.

    Though as things move in a more positive direction for the American economy, it would be premature to assume that things will go terribly for the gold market.

    It’s true that a strong dollar and higher interests means that gold is no longer a precious metal investors are seeking out for security.

    However it’s doubtful that even a significant drop in the value of gold will see major long term consequences.

    “We remain optimistic about the price of gold in the medium term,” wrote Commerzbank Corporates & Markets. “Reviving Asian physical demand and stronger investment demand should provide further impetus.”

  • Utah Student Pays Tuition in $1 Bills

    Luq Mughal, a 21 year old engineering student at the University of Utah, decided he’d had enough with the high cost of college tuition. So earlier this week he sent the powers that be a message by paying every dollar of his tuition bill. Literally. He lugged a metal case full of money into the bursar’s office and paid for his entire tuition bill in singles.

    As an in-state student and the son of a faculty member, Mughal already receives a substantial discount on his cost of attendance. But he’s not on daddy’s dime for the remainder of the cost, instead forgoing weekend frat parties for shifts at Home Depot.

    “By no means am I the saddest story on campus. There’s a lot of people here just as bad and probably worse,” he said. “The people making the prices are not actually aware of how hard it is on the students,” referring to a 5% price bump approved by university administrators this year. Utah’s tuition already had more than doubled over the past decade, from $2,742 for the ’02-’03 academic year to $6,511 this year, as a response to declining state funding for higher education.

    “When you spend cash, you feel every dollar that you hand over to someone else,” Mughal said. “You feel that you’re losing that. If you just swipe your card, it could be 10,000 or 100,000 bucks and you don’t really feel it. When you actually slide over a huge pile of cash, you really feel like you’ve spent that. That’s your money, and you also want to make that worthwhile by doing well in school.”

    Technically, Mughal had to mix a few five dollar bills into his payment, as the local banks where he got all his cash began to run out of singles.

    Not everyone was impressed with the stunt. In line behind Mughal was graduate computer science student George Zhang, who chose Utah over schools such as NYU due to the lower cost of attendance. “I think it’s pretty fair,” said Zhang.

    Now America waits as someone tries to do the same at the University of Michigan, which weighs in as the most expensive tuition for out-of-state students at a whopping $39,109 for tuition and fees alone.