The spot gold price is at $1221 a troy ounces at 12:00 in London.
Simon Denham at spread betting providers Capital Spreads gives the following insight into matters concerning the yellow metal:
"Gold prices are benefiting from all the doom and gloom in the headlines as it’s 4 bucks in the black this morning.
"The bulls will be hoping for a return to 1250 area soon to see if there’s enough momentum to take the precious metal to fresh new record highs, but they will be wary of the sort of corrections that can be had to the downside, with the last one being a retracement of 6.5%."
Long term outlook, are prices sustainable?
The past month has seen investors take shelter in gold as sovereign debt crises and uncertainty in the financial markets dampened hopes of a robust global economic recovery.
As a result, the price of gold per ounce has soared above US$1 200/oz, with the precious yellow metal last quoted at $1 217.55/oz.
A retrospective look at the gold price in real terms suggests that the price is still 40 percent below the peak it reached at the beginning of 1980.
So the gold price could continue to rise by another 67 percent before it surpasses its historical peak in real terms but when it reaches that peak, the reversal from those levels is likely to be quite swift and dramatic.
Market watchers have, therefore, questioned whether this level is sustainable.
SIM believes that in the short term, gold will be able to hold on to these levels as investors continue to seek shelter from uncertainty in financial markets in gold.
However, in the long term, it warned that prices are not sustainable.
"The gold price exhibits duality where it behaves either like a commodity or a currency and I believe that it is currently behaving like the latter," said Sanlam Investment Management equity analyst Shoaib Vayej.
