Price of Gold

Price of Gold Hit a New Record Today

Gold prices hit a new record today after data from the United States showed slower than anticipated economic growth. Costs for food and gasoline have risen, and consumer spending has slowed. The US debt and out-of-control spending, and borrowing has affected the U.S dollar which has continued to slump.

This comes on news from the Federal Reserve that low interest rates will remain a US policy for an extended period of time. Inflation in the United States has risen at its fastest rate in two and half years.

Precious metals have gained for 10 of the past 11 trading sessions. Investors continue to seek a safe haven for their money, due to rising inflationary pressures. The recent U.S jobless news revealed an unexpected jump further fueling gold’s momentum.

The price of Spot gold rose to an all-time high of $1538.35 an ounce today. The weaker dollar is widely seen as the culprit for rising gold prices. The recent macroeconomic report has fueled speculation that the US’s loose monetary policy will continue to be needed to boost the economy. Michael K. Smith, of T & K Futures and Options recently said, “Bernanke basically said, ‘hey, we are going to let the U.S. dollar just get crushed.”

Silver was also a big winner today, and its low price still makes it a prime candidate for investors. Widely viewed as a poor man’s gold, silver prices jumped to a new record today. Silver’s huge price swing role as 3.4%, as investors flocked to precious metals to capitalize on Silver’s much lower price than gold.

Price of Gold Rebounds

The price of gold rebounded today following Tuesday’s decline and the announcement from the Federal Reserve that they will keep their key interest rate at a historic low rate of low range of 0% to 0.25%. The Fed came to a unanimous decision to let its controversial $600 billion treasury bond purchasing run its course in order to keep short-term interest rates close to 0%. They gave no indication as to whether or not they would continue pumping large amounts of money into the financial system.

Federal Reserve Chairman Ben Bernanke is scheduled to speak today, and many hope he will address concerns about rising inflation fears associated with the decision, and the US debt. Ben Bernanke’s meeting with the media is set to begin at 2:15 PM Eastern. Many analysts don’t expect him to say anything but scripted remarks he has previously made in the past.

Gold investors continued this month’s purchasing spree on the news that the Federal Reserve will be slow to raise borrowing costs. Since this news is perceived to further weaken the dollar, many investors are turning to precious metals as a safe haven. The fact believes that by keeping the interest rates at a historic low it will help to stimulate the economy. However, this weakening of the dollar is proving beneficial to Gold rates. Keith Springer the president of Springer financial recently said, “All of this will move gold and silver higher as it will increase inflationary pressures and lower the dollar further.”

In other news Barrick Gold reported a 22% increase in their first-quarter profit. This news was in line with expectations. The company made a surprise bed of $7.65 billion bid for Equinox Minerals. The founder and chairman of Barrick Gold, ,Peter Munk recently announced to investors during an annual meeting that, ” notwithstanding the company’s bid for copper miner Equinox, Barrick remains firmly committed to being the world’s top gold miner.”

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.

Price of Gold Slid 1 Percent Today

The price of gold dropped one percent today on news of oil declines of 3 percent. Oil prices have slumped for two days in a row. Goldman Sachs is advising its customers to sell investments in oil, platinum, copper, and cotton. Goldman argues that record levels of speculative trading of crude has push prices in these commodities too high. The world’s biggest commodity trader recommends selling for the near future. Three years ago Goldman shock some investors up by claiming oil would see a “super-spike” forcing prices to $200 per barrel by 2010.

On Tuesday Paris-based International Energy Agency raised alarm by stating “there are real risks that a sustained $100-dollars-a- barrel-plus price environment will prove incompatible with the currently expected pace of economic recovery”. They also warned that recent high oil prices have hurt global demand for energy. In addition the International Monetary Fund warned Monday that high oil prices were a key risk factor to global economic recovery.

In today’s trading Brent crude fell 2.6% to $120.73 and finally settled at $120.94 in the afternoon. Gold fell by 1%, platinum fell 1%, Copper fell 2%, sugar fell 2%, and wheat fell nearly 3%.

Will Gold Hit $1500 an Ounce?

Gold speculators and traders have wondered for a while now whether gold will reach $1500 an ounce in the near future. The gold market like other investments doesn’t move in straight lines but rather in waves of up and down activity. This presents a unique opportunity for gold investors to profit on the short term as well as get in at a good price to make some immediate gains. All of this gold trading activity is especially prevalent when there is a lot of volatility in the currency and commodity markets like we are seeing recently.

Here are several of the top reasons we should see gold hit $1500 and ounce and above in the near future.

#1 The declining U.S dollar: As the dollar declines the price of gold has traditionally gone up. Frank Holmes the CEO and chief investment officer of U.S. Global Investors says, “Gold is attractive as a safe haven when the dollar is declining.” As the U.S deficit continues to grow it puts additional strain on the Dollar as the worlds reserve currency. All of this pressure on the dollar creates a need to seek additional investment opportunity in alternative as investors seek out other currencies and markets to put their money in.

#2 Inflation: The price of goods services and the continual rise of these prices, coupled with the increasing price of oil and other commodities has a tendency to drive people toward investing in gold. Putting money in gold has is typically seen as a safe place to invest money when there is an inflationary environment. Russ Winter of the financial blog Minyanville believes, “if the Fed keeps buying $100 billion of Treasuries until July 1, you can calculate that each $100 billion will push the commodity index up another 5% and the price of oil $7.00 a barrel.

#3 Increase in Oil Prices: when oil producing nations begin reaping record profits they often invest their excess capital in gold. With the general consensus believing that oil prices will continue to go up the outlook for continually increasing gold prices looks optimistic. Frank Holmes has believes that oil and gold have an approximate 75% correlation to each other. “This means that 3/4 times, when prices for one go up, prices for the other increase as well,” Holmes writes.

The general consensus is that the price of gold and oil are very likely to continue going up through the final months of “quantitative easing” QE2. Gold prices should continue to follow closely with other commodity prices. As geopolitical events continue to unfold in the Middle East precious metals should benefit.