Safe haven? Gold breaks $1,500 barrier for first time
The price of gold topped $1,500 an ounce for the first time on Wednesday as a weakened dollar plus fears over high inflation and countries' debt attracted investors to the safehaven precious metal.business Updated: Apr 20, 2011 22:41 IST
The price of gold topped $1,500 an ounce for the first time on Wednesday as a weakened dollar plus fears over high inflation and countries' debt attracted investors to the safehaven precious metal.
Gold reached $1,502.32 an ounce in early trade, but dipped back under the landmark barrier to stand at $1,499.3.
Silver meanwhile reached a 31-year high of $44.5 an ounce.
"Gold remains comfortably underpinned with short-term inflation pressures and economic woes triggering some fresh safe haven inflows," said Andrey Kryuchenkov, commodities analyst at Russian financial group VTB Capital.
Gold began its surge towards $1,500 on Monday after ratings agency Standard & Poor's revised its outlook on US sovereign debt to "negative" from "stable."
Metals consultancy GFMS had forecast last week that the gold price would soar past $1,600 this year, driven primarily by fears over high inflation.
Gold prices have risen by 6% since the start of the year, breaking a series of record highs along the way. They breached $1,000 for the first time in March, 2008.
"Gold will remain well bid as long as the ongoing debt and inflation worries persist," said Ian O'Sullivan, trading group analyst, Spread Co.