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Price of Gold Increases Above $1500 An Ounce

The price of Gold raised above $1500 an ounce yesterday, and today continues to climb. $1500 an ounce gold was an all-time high milestone. Today major stock markets shot up in large part due to strong corporate earnings in Europe and the United States. Overall there was a prime commodities rally after the Dow reached a near three-year high.

However, weakness in the US dollar, and Greek debt defaults concerns with the Euro continue to dog the currency markets. Inflation and debt worries continue to push commodity prices upward. Currencies that benefit from higher commodities including the Australian, and Canadian dollar are performing well. Bullish investors of Gold call options have been very active this week.

According to analysts at Capital Economics we can expect to reach $1600 an ounce before the end of the year. Some experts anticipate gold will continue to climb and could even reach $2000 an ounce before 2012.

The main drivers of high gold prices lately are due to slower than anticipated economic growth in the US, Asia and Euro zone, as well as destabilizing events such as the earthquake in Japan and political unrest in the Middle East. Another factor played a part in the rise of Gold is the support for finding an alternative to the US dollar as the world’s reserve currency.

Jim Steel a precious metals analyst with HSBC recently said, “Any increase in non-US dollar assets would likely be indirectly supportive of gold, especially if it weakened the U.S. dollar’s status as a reserve currency.” Gold futures hit a record for the ninth time so far this month.

Another big winner this week was silver which rose above $45 an ounce for the first time since 1980. This is a 31 year high for silver. It has increased by almost 150% in the last year alone. Gold and silver prices often rise in times of economic upheaval and news of problems with the economy. With debt and inflation concerns being fueled by the S&P’s recent downgrade of the US debt outlook from stable to negative, it looks as if precious metals will continue to climb.

Gold Prices Hit $1500 an Ounce

The price of gold hit $1500 an ounce for the first time ever today as gold futures for June delivery reached $1500.50 an ounce. This intraday high was briefly reached before resettling to $1495 an ounce. The sudden Gold Spike comes on news from Standard & Poor’s report that the U.S outlook for long-term debt has been reduced from stable to negative. In addition uncertainty regarding the strength of the dollar has driven investors to look for an alternative. Their concerns regarding US debt, and the deficits has boosted demands of precious metals as an alternative to holding the dollar.

The price of gold has kicked up words continually for the last several months. Lim Chae Myung of Hyundai Futures recently said “The bullish trend becomes pronounced as more and more people get out of the dollar to buy hard assets.” Gold futures have increased approximately 31% over the last year. Some analysts are now expecting gold prices may reach $1600 an ounce by the end of 2011 or sooner.

Today immediately delivery of gold increased by up to 0.3 percent to reach an all-time high of $1,499.32 before pulling back. Carlos Sanchez of CPM Group said, “prices could go as high as $1,550 in the next couple weeks as investors focus on political gridlock in Washington.”

The deadline for reaching an agreement on whether or not to raise the debt ceiling in the US is to in May. Depending on the news coming out of Washington DC the debt ceiling events will most likely creates further activity.
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