Gold hits new record

27/09/10 15:40 CET

economy

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Gold has hit a record high of $1,300 an ounce in London while silver jumped to its best price in thirty years.

The reasons: the dollar, in which precious metals are priced, is weak, and investors remain concerned over the global economic recovery as central banks devalue money by printing more for stimulus.

The dollar fell sharply last week on speculation of yet more quantitative easing in the US.

Barrick Gold, the world’s number one miner of the precious metal, believes gold prices could “easily” outperform recent record highs to rise above $1,500 an ounce in the next year.

“From what we’re hearing, there are still significant new buyers coming into the market,” Jamie Sokalsky, the company’s chief financial officer, said on the sidelines of a meeting of the London Bullion Market Association.

Demand for gold has soared in recent years as the financial crisis boosted the precious metal’s appeal as a haven from risk, while concerns quantitative easing may debase paper currencies have fuelled buying of bullion as an alternative asset.

Supply has struggled to keep pace, with central bank selling, once a significant source of bullion to the market, falling off sharply and scrap supply erratic despite rising prices.

More about: Economy, Gold, Markets

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