SA:US and EU debt worries push gold to highest price ever
• The price of gold hit US $1,600 an ounce in Monday trading
• Record follows 11 days of gains as concern grows
• Investors are worried about a Greek and US default
The price of gold has risen to a new high, just days after it broke an all time record as debt concerns in the US and Europe plague the market.
The precious metal broke through US $1,600 an ounce for the first time ever Monday, rising US $12.30 to US $1,602 in London trading.
This comes after 11 straight days of gains as investors run to safe havens amid debt concerns in the world’s two largest and most developed economies, namely the US and EU.
European leaders are meeting at a summit this Thursday to try to contain the fallout of the Greek debt crisis, while investors are increasingly concerned the country will default on its debt.
In the United States, politicians have shown themselves incapable of swift action in raising the debt ceiling and a nasty political stalemate between the Republicans and Democrats has fuelled speculation that a deal to raise the debt ceiling may not be reached, further undermining market confidence and pushing up the price of gold.
With US Treasury bonds, traditionally a safe investment, no longer seen as watertight, investors are running to the age old safe haven found in gold.
