Gold Flirts with New Highs
Source: The Street, Alix Steel (9/8/10)
"Gold prices settled at a record high Tuesday. . ."
Gold for December delivery was up $1.30 to $1,260.60 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Wednesday has traded as high as $1,264.70 and as low as $1,254.60. The U.S. dollar index was losing 0.55% to $82.43 while the euro was rising to $1.27, and the yen hit another 15-year high vs. the dollar. The spot gold price Wednesday was adding more than $4, according to Kitco's gold index.
Gold prices settled at a record high Tuesday and early Wednesday broke through their intraday high of $1,264 an ounce. Investors were turning to gold as a safe-haven asset amid a struggling Asian stock market and worries that eurozone banks' exposure to sovereign debt is worse than expected.
The Japanese yen hit another 15-year high against the dollar, which crimped export demand, while European markets also struggled. Yields for Portuguese, Irish and Greek bonds rose as governments had to sweeten the pot for investors.
The slew of negative news painted a rough picture overseas, but investors vacilliated between the safety of gold and the risk of stocks after U.S. markets opened on a positive note.
"People are just really going after the physical metal," says James Turk, founder of GoldMoney.com, a bullion dealer, who attributes gold's recent rally to supply and demand constraints.
The World Gold Council said in its second-quarter Gold Demand Trends report that the supply of gold grew 17% from a year earlier while gold demand grew 36%. Turk is looking for $1,800 to $2,000 gold this year. Based on these prices, he doesn't believe it's too late to dollar-cost average and buy gold every quarter.
Video: How to Buy Record High Gold Prices