Gold Prices at a Record High

The price of gold continued to rise yesterday (Tue 9th) after surpassing $1400 dollars an ounce for the first time ever on Monday. Surging prices come in the wake of a number of economic concerns pushing investors towards the precious metal.

The United States Federal Reserve last week announced a controversial second round of quantitative easing, condemned by China and Germany among others, which has sparked worries of a weak dollar and global price inflation. Fear of this inflation is likely to be one of the factors in this recent increase in the demand, because gold is seen as a safe way of storing money during times of price instability.

At the same time, difficulties within the Eurozone are also understood to have played a part in further increasing the rush for gold.  The falling value of the Euro on Monday fuelled primarily by the sovereign debt worries in Portugal, Ireland and Greece has encouraged traders to convert their money to relatively safe bullion.

Some analysts are also attributing the increase to the suggestion on Monday by World Bank president Robert Zoellick that an updated gold standard system should be established. Mr Zoellick urged that a new international currency trading system backed by gold was needed in order to address the problems of the current currency market. 

Whatever the cause, gold looks set to maintain high value into the near future as uncertainties about the future continue to concern traders. Some commentators are urging those thinking of investing to be cautious however, suggesting that having already increased by around 25% this year gold could simply be another bubble about to burst.