Europe's Cooties: Are they Contagious and will my Gold Catch Them?

Somewhat positive news from the Eurozone seems to be affecting gold prices with the same consistency of a 5-year-old.

The price of gold has been rather fickle the past couple of days; up $6.50 at the close of last Friday then down $9 today. These fluctuations will almost always reflect the current topic of talk amongst retail metal investors - and they seem to be freaking out over EUROPE's debt crisis.

Last night gold prices started to rise (about $10 or so) and then good news came out of Europe whereby the Italian government had just approved a three-year austerity plan - ahead of the crucial EU meeting taking place later this week. According to the vice president of the European Commission overseeing economic and monetary affairs and the euro, Olli Rehn, "This is essential to reinforce the credibility on the Italian economy but also to regain control on the very high debt and alleviate the burden on future generations of Italians." Rehn further stated that the package, which is comprised of tax hikes, spending cuts and pension reforms, "is crucial to keep the momentum in economic reform and in the political renewal."

Sounds like POSITIVE news right? But no. Instead, following that bit of good news, gold lost its $10 gain and converted into a loss (as low as $17 at one point). The 'zen' thing to do here is to not get frustrated at gold price moving contrary to what should be good news. The 'ballsy' thing to do is to confront what is ACTUALLY happening. Investors move gold prices with their purchases and sales and they were obviously confused. Just last week, when Europe had good things to say, gold prices (the investors) would take a cue and head upwards or vice versa when negative news spilled out. Yesterday, that formula was completely reversed. So what does this mean?

Well I'm not going to tell you what to do with your money, but as you may have read from hundreds of newsletters out there, the decision to be made for any tradable instrument basically centers around the three major actions of selling, holding or buying. Confusion amongst investors reacting positively to good news from Europe and then negatively to...good news from Europe presents a rather clear picture that they are neither sure about buying nor selling. So then is holding the only viable option? Can't say for certain, but it's definitely up to you and your best friend: "Good Judgment."

Well if you just want a little more assurance from someone...more...famous...then one very famous expert you can look toward is commodities' guru, Jim Rogers, who had this to say regarding gold today: "I own gold and I am not selling my gold." Coming from the man who predicted the commodities rally in 1999 and has been followed closely by investors worldwide ever since, I'd say...'nuff said. For today at least.

Be safe, be wealthy and above all else, be happy.

-Mitch