This week has seen the price of gold reach records highs, with it finally reaching $1,600 for a troy ounce. This is mostly likely due to growing fears of debt in both Europe and the US, with most people rushing to buy gold and other precious metals.
Not only did this occur in the metals financial market, but also saw other currency markets such as the Japanese Yen and Swiss Franc closing against the US dollar at a record peak. There has been a rush of investors in the European markets who are moving into the purchase of physical gold, and with the debt crisis moving across to Italy for the first time, this is mostly likely to continue in the near future.
On Friday, there were the most sales seen in the past year of gold coins at UBS in Zurich according to the bank’s strategist Edel Tully. She was reported to have said that the purchasing of the coins came from many different countries in Europe, with a fear that the trading industry of gold is becoming more prevalent. The fear is unlikely to disappear until Greece’s problems have abated and there is a clearer picture of the future for them.
The upturn in the market, which has actually been about 8% in the past couple of weeks, has potentially been helped by the fact that Washington has yet to make an agreement on how to get the country out of its debt by the beginning of August.
No only gold, but silver also rose at the beginning of the week, peaking at $40.15, which is the first time since May it has broken $40. This is an increase of nearly 20% over the previous two weeks. There is a belief that gold will continue to rise over the coming years, however, compared to 1980, with the allowance of inflation, it is still a long way off what it was, which would now be $2,400.
According to the strategist at the Bank of New York Mellon, Neil Mellor, the $1,600 milestone is just another level of which gold has hit since the turn of the century, and will continue to grow as long as there is nothing in the way of the doubting investors.
