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.
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