The 2009 gold rush continues as high demand and smaller supplies send gold to yet another record high. The price climbed over $130 per ounce, pushing it up 30% for 2009. Gold has gone up from around $300 an ounce in early 2000, to it's lofty levels over the weekend. Clay Teague with Scotsman Coin and Jewelry says they are seeing an added interest in gold among investors in the St. Louis area. "(Gold) is proving to be a stable investment as time goes on. As demand increases and supplies stay low, it appears this price trend will continue."
The weak dollar is also helping push up the price of gold. Investors are fleeing from the dollar and putting money in precious metals to hedge against inflation. Gold market analysts are saying that $1300 an ounce is a possibility for gold as the world recession stretched into 2010. Platinum also hit a record over the weekendCentral banks will be net buyers of gold this year as they diversify away from the U.S. dollar, marking a reversal of a decades-old trend, global commodities investment fund BlackRock said on Monday in comments that helped drive bullion to fresh record highs.
Investment in gold by central banks has picked up recently, with India buying 200 metric tons from the International Monetary Fund, and Taiwan's central bank is studying whether to raise the amount of gold in its forex reserves, with China and South Korea also debating the issue.
BlackRock is one of the world's largest fund managers, boasting a total US$1.4 trillion under management across all asset classes. It is manager and adviser to the U.S. Federal Reserve and its views can influence the direction of global markets.
Evy Hambro, who runs two of the world's largest commodities funds, BlackRock World Mining Fund and Gold & General Fund, gave an upbeat outlook for gold during a media briefing in Australia.
His forecast for net central-bank purchases of gold this year would, if met, mark the first year in two decades when the world's central banks bought more gold than they sold. They have been net sellers each year since 1988.
Gold stored in central banks worldwide has dropped more than one-sixth since 1989.
"The most recent break-out in the gold price in U.S. dollars has caused most gold prices to start trending higher at the same time," Hambro said, adding that investors were now looking for gold to rise in other commodities as well as U.S. dollars.
"When you start to see the price rising in a range of different currencies, it is a clear sign of a very strong market to come," he added.
Spot gold stood at US$1,123.70 by 9:16 p.m. EST after touching US$1,126.30 per ounce, a record, versus the notional New York close of US$1,118.50, helped higher by Hambro's bullish outlook, according to financial broking group IG Markets.
Bullion has been on an upward spiral as a hedge against the U.S.
