Gold hits record on US and euro zone debt fears

Gold prices hit new record highs on Thursday after the Federal Reserve hinted at further policy easing – that is printing more dollars.

Investors also turned to the precious metal as a safe haven after Moody’s warned the US may lose its AAA credit rating which pushed the value of the dollar down further.

Greece’s latest credit rating downgrade by Fitch and growing concerns over euro zone debt levels are another factor.

“A lot of chatter has been going through about Greece, Portugal, now Italy and Spain, and the gold market has been pricing this in on a continuous basis,” said Bayram Dincer, an analyst at LGT Capital Management.

“In the US… some interpretation could be made that the likelihood is increasing of further quantitative easing,” he added. “Another problem is the debt ceiling… and the US being put under review. Aggregating all these multiple driving factors for gold, it’s very positive.”

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