Gold futures smashed through previous highs to set a new record above $1,300 per troy ounce on Tuesday, validating goldbugs around the world but sending a worrying signal about the stability of the global economy.
Demand for gold and the rising price of futures typically indicates pessimism about the state of the markets; in particular, it reflects a lack of confidence in currencies.
While the dollar fell, Comex December gold futures climbed 10.5 points to $1,309.10 per troy ounce; futures for December 2011 rose to $1,318.60 per ounce.
"People are buying every dip in gold," Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois, told Bloomberg News. "The trend isn't going to change until interest rates rise."
Silver gained even more, with December silver jumping 27.4 cents to $21.745 per troy ounce; so far this year, the white metal has outperformed gold by about 10 percent. The last time silver was this expensive was 30 years ago, when the Hunt Brothers attempted to corner the markets using silver futures and options contracts; the price spiked to nearly $50 per ounce before crashing to earth.
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