In what analysts are now calling a parabolic ascent, gold reached a new record today of $1,894.80 an ounce, Bloomberg reports. “Gold is strong in any and all currency terms, and it is now entering that stage when prices go parabolic,” said economist Dennis Gartman.
Other analysts were hedging their predictions. The Financial Post quoted Dundee Wealth economist Martin Murenbeeld saying, “I suspect that there is one hell of a correction to this most recent surge in the not-too-distant future. Yet such a correction will likely depend upon policy actions that policymakers are very reluctant to take. Meanwhile the crisis is rapidly widening, indeed with a rapidity equal to the steepness of the rise in the gold price.”
Murenbeeld added that the US and European fiscal crises could push gold past $2,400 an ounce by 2013 or sooner, surpassing the inflation-adjusted record of 1980.
While gold climbed 33% this year, silver rose 41%, reaching $44.055 today. “Silver is like a beta version of gold, but I think overall the market is simply looking for alternatives,” said Dominic Schnider of UBS AG. Platinum hit a three-year high of $1,894.50 an ounce and palladium $753.
The metals’ gain resulted from currencies’ pain as the yen and Swiss franc joined the dollar in its descent. Some speculators believe Japan and Switzerland will try to boost exports by devaluing their currencies.
by Greg Klein