Investing in Gold
Gold continued its record-breaking climb in global markets Wednesday, after settling at an all-time high during volatile trading the day before.
What prices are doing: Gold for June delivery was up as much as $25.10, or about 2% before U.S. markets opened, putting the precious metal at a new intra-day high of $1,245.40 an ounce. It eased to $1,240.80, up $20.50.
It reached its previous intra-day high, $1,226.10, on Dec. 3, 2009.
What’s moving the market: Uneasiness about a volatile stock market is a boom for the precious metal, which is considered a safe-haven investment in times of economic uncertainty. On the day of the stock market’s so-called “flash crash” last week, gold rallied 2%, settling at $1,197.30.
Choppy trading since then has further boosted the metal’s upward momentum, as gold went on to settle at a new all-time high of $1,220.30 on Tuesday.
Concerns about the European debt crisis, which have kept markets seesawing since the Dow’s near 1,000-point drop last Thursday, have amplified uncertainties about a global economic recovery. In turn, that has boosted the appeal of tangible commodities over paper currencies or equities, which are seen as higher risk, analysts said.
Investors are also wary that Europe’s nearly $1 trillion rescue package announced over the weekend will speed up inflation and weaken the euro, analysts saidy.
What analysts are saying: Jeffrey Nichols, managing director of American Precious Metals Advisors and senior economic adviser to Rosland Capital, has for the last year predicted that gold would reach a new high by the middle of 2010. He expects gold to continue its upward trend and reach a $1,500 high by the end of the year.
