Gold Prices Hit Historic High!
December 29, 2008 by Martha Rooks
I was going to write about making resolutions relating to buying and investing and enjoying gold in coin, jewelry and investment gold this week, but when I took a look at the news of the day, I felt compelled to discussed what is going on in the markets. That’s because gold advanced for a second day to an 11-week high as mounting geopolitical tensions in the Middle East boosted the appeal of the precious metal as a haven. Silver and platinum also jumped.
I have been market-watching for years, but I have to say that I find this all fascinating. I have gold jewelry (along with other precious metals and gems) and yet when the price climbs like it has lately, I consider what I could sell. Or whether it’s time to buy more.
The embittered, tragic tension in the Middle East over the weekend drives the latest gold increase, as Israel called up reservists following two days of air attacks against the Hamas-led Gaza strip. This has pushed the price of gold up 2.4 percent to $890.49 an ounce. (Oil also gained as much as 5.6 percent. That’s because the Middle East produces almost a third of the world’s oil.)
“Gold is obviously gaining a lot of favor as a safe haven asset again,” Darren Heathcote, head of trading at Investec Bank Ltd. in Sydney, AU, said. The weaker dollar and rising oil prices helped boost the metal, he said.
Keep in mind, close to 300 Palestinians are dead in the weekend’s air strikes. This is the deadliest attack since the Six-Day War of 1967. Israel began the bombardment two days as part of an effort to halt rocket attacks coming from Islamic militants firing from inside the southern towns, after a six-month cease-fire between the Israeli government and Hamas expired on Dec. 19.
Meantime, other precious metals are also up. Silver rose 2.2 percent to $10.94 an ounce after rallying 3.6 percent on Dec. 26. Immediate-delivery platinum advanced 3.8 percent to $925 an ounce, gaining for the fourth straight day. It earlier traded as high as $935, which is the highest since Oct. 16.
AngloGold Ashanti Ltd., which owns the Siguiri gold mine in Guinea, said yesterday its operations in the West African country are continuing, even after the ruling military junta said Dec. 27 it canceled all mining agreements.
“In this thin market, the Guinea news may help boost gold prices, but the major factor is the tension in the Middle East,” said Tatsuo Kageyama, an analyst at Kanetsu Asset Management Co. in Tokyo.
And futures continue to do well, too. December-delivery gold on the Tokyo Commodity Exchange rallied 4.2 percent to 2,574 yen per gram ($884 an ounce) at 2:15 p.m. local time. December-delivery platinum rose 4.4 percent to 2,692 yen a gram.
Have you talked with friends at the water-cooler lately? Some say that it’s time to sell and get any money that you can for the gold that you have. Others suggest it’s time to hang on and ride the wave as the price goes ever higher. One friend said he wouldn’t dream of letting go of any precious metals in the current market, as he was too concerned about the state of the economy and what it would mean in his life. Aren’t we all?
The truth is, if your cash-flow is good, it’s a great time to buy more gold as a hedge against inflation. If you are cash-poor, it might be time to sell. But if you can stay in the market longer, gold may become even more profitable as the recession deepens and takes hold.
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