Investors unconfident about the success of bailout packages for Greece and Ireland are redirecting their interests toward precious metals to hedge the insecurity, Bloomberg reports.
Silver prices increased 2.4 percent on Wednesday after having shot up 15 percent last month, the largest increase since May 2009. Gold reached record prices in euros and analysts predicted its value will continue rising next year and in 2012. Goldman Sachs predicts the precious metal's price will rise to $1,750 in 2012.
"Gold is swiftly becoming the next reservable currency," Dennis Gartman, an economist and editor of the Suffolk, Virginia Gartman Letter, told Bloomberg.
Expenses for insuring bonds for Italy, Spain and Portugal also are rising very rapidly as Europe's debt-laden banks navigate through methods of halting the crisis spreading from one country to the next. When Greece accepted a bailout in June, the price of gold went up.
Gold's price also went up as Ireland wrestled with a bailout package early last month.
A report by Anne-Laure, Tremblay, a London-based analyst at BNP Paribas SA, predicted gold's price will reach $1,500 per troy ounce in 2011 and $1,600 per troy ounce in 2012.
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