The price of gold shot up on markets around the world as American markets reopened and people went back to work following a holiday weekend. The news suggests that investors are still very skeptical of the market, skeptical of the dollar, and skeptical of investments retaining their value in a shaky world economy.
Gold is now pricing at $1003.20 on the New York Mercantile Exchange. If you recall, the previous high was March 2008, when it rose all the way to $1033.90.
The precious metal is often purchased as a hedge against inflation and a safe-haven to other investments as players seek to shelter losses if the dollar is expected to weaken further. This is what happened in February and March of last year as investors sought shelter against the weakening economy. In fact, it was one year ago this week that the recession was finally claimed by the U.S. government’s economists, having officially arrived as defined by the gross domestic product having declined for two or more quarters.
This year, the economy is said to be recovering. But so far, the job market has not recovered. Unemployment numbers released last week showed 9.7% unemployment in the United States, which is the highest those figures have been in more than 20 years.
This latest peak of gold prices shows uncertainty over jobs and the dollars standing.
“It is mainly the reflection of the weakness of the dollar,” according to Julian Jessop, an economist with Capital Economics.
Jessop also believes that the price of gold is further strengthened by market expectations that global central banks will keep their interest rates low for some time to come, encouraging investors to put their money where they believe it can grow, or at the very least will not decline in real value.
Gold is always a good value, but if you are considering buying it as an investment, then now is an excellent time. Because the next few months may be too late.
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Category: Gold Prices