As the U.S. economy descends into recession, gold is spiralling upwards.
August 9, 2011- Gold prices continue to climb above the record mark of $1,700 per ounce on Tuesday as many investors held onto fears of a double dip recession after the downgrade of U.S debt by Standard & Poor’s. Futures for gold for December increased almost $32 to $1,745 after reaching an all time high of $1,782 an ounce in the New York Mercantile Exchange.
Trading was between a low of $1717 and a high of $1,782. This is the second consecutive day the prices have increased. They did back off slightly from the record highs but many believe they will increase again after this profit taking is over.
Analysts are also cautioning that larger exchanges could start to implement margin hikes like was done with silver and thus start pressuring gold prices. The world’s largest traded fund in gold exchange, SPDR Gold Trust said their highest inflow in a day was reported since May of 2010 at 23.5 tons with holding coming close to all time high 1,310 tons in June 2010.
A statement is due to be released by the Federal Open Market Committee at 2:15 EDT and investors also will look to the Federal Reserve for any indication of possible quantitative easing. Commerzbank warned they feel the rise in gold is excessive and investors are responsible for that increase.
