Gold rockets to all-time high
Source: Bloomberg News |
July 14, 2011, Thursday
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Print Edition
Print Edition
GOLD climbed to a record in London and New York as concern about Europe's debt crisis spurred demand for the metal as a protection of wealth. Bullion rose to an all-time high in British pounds.
Ireland joined Portugal and Greece yesterday as the third euro-area nation to have its credit rating cut to below investment grade. Concern about default in the euro region, faster inflation and a weakening US dollar spurred investors to hold US$125.4 billion of assets in exchange-traded products backed by precious metals, and has also sent bullion to an all-time high in euros.
Gold "is still going to go for a significant period of time," Martin Murenbeeld, the chief economist at Toronto-based DundeeWealth Inc, which manages more than US$50 billion, said on July 11. "We're in a very difficult financial period in the world. You have the European situation. The faith in paper currency is rapidly ebbing."
Gold futures for August delivery advanced as much as US$17.40, or 1.1 percent, to US$1,579.70 an ounce and were at US$1,573.30 by 7:52am on the Comex in New York. The previous all-time high was set on May 2.
Gold is up 11 percent this year, heading for an 11th straight annual gain, the longest winning streak since at least 1920 in London. The MSCI All-Country World Index of equities gained 1.9 percent in 2011, the Standard & Poor's GSCI Index of 24 commodities is up 9.2 percent and Treasuries returned 3.6 percent, a BofA Merrill Lynch index found.
Bullion jumped to a record 1,123.50 euros (US$1,580) on Tuesday and 988.33 pounds (US$1,577) yesterday as European finance ministers failed to present a solution to the financial contagion that's threatening to spread to Italy from Greece, Ireland and Portugal. Moody's Investors Service lowered Ireland to Ba1 from Baa3 yesterday, citing the probability the country will require additional official financing. The cost of insuring debt from Italy, Spain and Portugal climbed to records this week.
More than a year after the European Union and the International Monetary Fund gave Greece 110 billion euros (US$155 billion) in aid, they're considering options for additional support as the country's borrowing costs and indebtedness continue to grow.
The IMF welcomed the commitment by finance ministers of the euro region to safeguard financial stability and pledged to continue working closely with Greece and European partners, managing director Christine Lagarde said on Tuesday.
Ireland joined Portugal and Greece yesterday as the third euro-area nation to have its credit rating cut to below investment grade. Concern about default in the euro region, faster inflation and a weakening US dollar spurred investors to hold US$125.4 billion of assets in exchange-traded products backed by precious metals, and has also sent bullion to an all-time high in euros.
Gold "is still going to go for a significant period of time," Martin Murenbeeld, the chief economist at Toronto-based DundeeWealth Inc, which manages more than US$50 billion, said on July 11. "We're in a very difficult financial period in the world. You have the European situation. The faith in paper currency is rapidly ebbing."
Gold futures for August delivery advanced as much as US$17.40, or 1.1 percent, to US$1,579.70 an ounce and were at US$1,573.30 by 7:52am on the Comex in New York. The previous all-time high was set on May 2.
Gold is up 11 percent this year, heading for an 11th straight annual gain, the longest winning streak since at least 1920 in London. The MSCI All-Country World Index of equities gained 1.9 percent in 2011, the Standard & Poor's GSCI Index of 24 commodities is up 9.2 percent and Treasuries returned 3.6 percent, a BofA Merrill Lynch index found.
Bullion jumped to a record 1,123.50 euros (US$1,580) on Tuesday and 988.33 pounds (US$1,577) yesterday as European finance ministers failed to present a solution to the financial contagion that's threatening to spread to Italy from Greece, Ireland and Portugal. Moody's Investors Service lowered Ireland to Ba1 from Baa3 yesterday, citing the probability the country will require additional official financing. The cost of insuring debt from Italy, Spain and Portugal climbed to records this week.
More than a year after the European Union and the International Monetary Fund gave Greece 110 billion euros (US$155 billion) in aid, they're considering options for additional support as the country's borrowing costs and indebtedness continue to grow.
The IMF welcomed the commitment by finance ministers of the euro region to safeguard financial stability and pledged to continue working closely with Greece and European partners, managing director Christine Lagarde said on Tuesday.
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