Gold hit another new high today, its ninth this year and a 15% increase over 2010, CNBC reports. Continuing fears about the American and European economies once again propelled the precious metal to greater heights.
Today’s record spot price of US$1,641.50 dropped later in the day to US$1,640.01, while silver reached $40.11, platinum $1,791.99 and palladium $825.22 an ounce.
There’s no stopping it, and there’s no point standing in the way of it.—Robin Bhar
Among those putting their faith in gold was South Korea’s central bank, which made its first bullion purchase in 10 years.
“This news reiterates the fundamental view that most investors, asset managers, and even central banks hold true—that gold remains the quintessential currency hedge, a stabilizing asset for portfolios and a safe haven in uncertain economic times,” said David Meger, director of metals trading for Vision Financial Markets.
Although the US Senate was expected to approve a last-minute deal to avoid default by raising the $14.3-trillion debt ceiling, concerns remained that the world’s largest economy would suffer a lower credit rating. Spain and Italy, meanwhile, replaced Greece as Europe’s highest-profile debt delinquents.
Nevertheless, gold’s performance took some analysts by surprise. “I would have thought gold would pause for breath and move lower. I thought $1,650 would be the target two or three months down the road,” said Robin Bhar of Credit Agricole. “There’s no stopping it, and there’s no point standing in the way of it. You just don’t know where the top is going to be.”
by Greg Klein