The gold price per ounce has risen markedly this year hitting an all time high at $1354 an ounce on the Comex division of the New York Mercantile Exchange. Gold is seen as good investment strategy in large part due to a hedge against currency inflation.
Traditionally gold has been the ultimate reserve currency and it has been achieving record highs as the U.S government proposes additional stimulous spending measures.
According to George Gero, VP of RBC Capital Markets Global Futures, “Buyers are using gold and silver to hedge possible losses in purchasing power.”
Suki Cooper an analyst with Barclays Capital said,”The broader macro environment remains favorable for gold with market anticipation of further quantitative easing and concerns about the shape of the economic recovery continuing to support interest.”
Gold is often seen as the real measure of confidence of any currency. The dollar denominated gold often moves against the U.S dollar, as a solid buck makes it more expensive for purchasers who use other currencies. How long will the current gold frenzy last… Dow Theory Letters’ Richard Russell say’s this, “This bull market will not be over until we experience a gold frenzy on the part of the public.”