BOSTON (May 3, 2012) - Spain is back in a recession again, news that has caused a weak opening for Wall Street this week and made owning gold look like a stable choice for many investors.

While the latest gold prices fell about 0.1 percent, stocks in France and Spain took much harder hits, going down 1.3 percent over concerns about the stability of the European market. Spain's nosedive, compounded by news from the US Department of Commerce whose data shows the US economy's growth may be slowing, too, means that investors are reaching for assets with lower risks over the long term.

Investors note that this is the second time in the last three years that Spain has been in a recession, with its economy shrinking nearly a third of 1 percent in the first quarter of 2012 alone. Bad debt from the housing sector in Spain has been a problem for Spanish banks. Eleven Spanish banks have been downgraded by Standard & Poor, and fears continue to grow that should Spain go through deeper economic woes, Europe will not have the funds to properly bail it out.

In some respects, gold prices being lower in the US represent an opportunity for investors right now. Obviously, low stock prices represent a chance to seize quality stocks while they cost less, but in Spain, the problem appears bigger than what we saw recently in Greece. A recent article in Time magazine indicated that with Spain being the 4th largest economy in Europe if it does enter a crisis it could really strain the European Union. Only Germany, France and Italy have stronger economies than Spain, but Italy is hardly very stable and problems with neighboring Spain could spill over into both Italy and Portugal which currently stands at the edge of needing a bailout.

European economies have had a global reach for quite some time. If there is more financial havoc in Europe then the effects will certainly be felt around the world, Time magazine emphasized.

Roubini Global Economics' Megan Green was quoted as saying, "Watching developments in Spain since the beginning of April has been the source of non-stop déjà vu for anyone who spent 2010 watching events unfold in Ireland."

This does appear to be what is going on in Spain and by being prepared in advance, investors can make wiser decisions about how they choose to diversify their portfolios.