Gold prices hit new record high
Mon, 11 Apr 2011 16:34:47 GMT
Investment bankers and commodities analysts are giving the thumbs up for putting money into gold as the price of the yellow metal has advanced to a record.
Gold rose as high as USD 1,476.21 an ounce and was bid at USD 1,467.40 an ounce on Monday, against USD 1,472.70 late in New York on Friday, Reuters reported.
"Looking across the board, over the last week there has been investor interest in the metals," global head of commodity derivatives trading at Standard Chartered, Jeremy East, said.
He added that gold is better supported than silver because it has a dual role as an investment vehicle and an industrial commodity.
The comments come as the price of precious metals has increased this year by elevated oil prices after popular uprisings swept across the Middle East and North Africa.
The debt crisis in some smaller euro zone economies, such as Portugal, has also contributed to the hike in the price of bullion.
"Gold is definitely supported by the Portugal bailout and the weakening dollar, but silver seems much more speculative," East said.
"If gold pulls back USD 50, we would expect to see some good physical demand coming in. Silver needs to do a lot more."
Gold will profit from a weak dollar as it makes commodities valued in dollar cheaper for people holding other currencies.
Economists say that investor money has flowed to precious metals due to the potential for soaring inflation in developing markets and changes to monetary policy in the United States.
“Gold investor interest is likely driven by ongoing concerns about inflationary pressures, both in emerging and developed economies, sovereign debt levels and economic uncertainty, notably in the light of current high oil prices," Anne-Laure Tremblay, an analyst from Paris-based BNP Paribas banking group, said.
“Global monetary policy -- not only the US -- is one of the key themes for gold in 2011,” she added.