Gold has hit an all-time high above $1,500 an ounce and silver has also surged, with precious metals seen as a safe haven in times of economic uncertainty.
Traders said the latest record prices for gold are due to a combination of factors – the weak dollar, higher crude oil prices and worries about sovereign debt problems in Europe.
After falling in 2006, gold has risen ever since. The financial crisis in 2008 saw investors seek safety from the turmoil on the stock markets. Gold broke through the $1,000 an ounce mark in 2009.
With interest rates set to remain low in the US for some time and inflation picking up, Hong Kong based financial advisor Martin Hennecke of Tyche Group said investors have little choice but to buy bullion: “Where are clients looking for safety going to shelter? Where do you go, do you just hold your money in cash under the bed? And therefore investors are increasingly looking at gold as a hedge against sovereign default risk, as a hedge against inflation on a global basis.”
Silver is doing even better, hitting a 31-year high this week and so far this year it has outperformed gold, up more than 40 percent against gold’s five percent rise.