The price of spot gold hit new record highs Friday, rising nearly 1 percent to break past the $1260 point to trade at $1260.40 per troy ounce, reported Bloomberg.
Gold futures previously reached a record price of $1251.85 an ounce last week, but today gold’s rise was accompanied by a corresponding rise on both European and U.S. stock markets, which climbed as a strong Spanish bond sale assuaged some fears that the debt crisis in the euro-zone would spiral out of control.
Bruce Ikemizu at Standard Bank Plc. told Bloomberg that gold is on track to hit $1,300 an ounce this yar, because of decreasing demand for alternatives to the most liquid currencies, the dollar and the euro. U.S. Treasuries have been the traditional store of value for major reserves, but continued threats to their stability mean that many central banks are switching into bullion as an alternative.
In Shanghai, Yin Zhongqing, a member of the Chinese congress finance committee, said that the country should cut holdings of foreign debt – widely understood to mean U.S. Treasuries – and increase its holdings of gold and oil, reports BusinessWeek. These comments will help sustain the rise in gold and oil futures, given the massive size of China’s reserves.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.