An uncertain global growth outlook and ongoing weakness in the U.S. dollar have helped push gold prices through the $US1300 an ounce barrier.
In the United States, gold prices rose by US$9.70 to settle at $1,308.30 an ounce on Tuesday. Earlier in the day, it reached $1,311.80/oz, the Associated Press reported.
Gold prices have broken a series of records in recent days as investors seek alternatives to the stock market and as prospects for the U.S. economy remain cloudy.
Mike O’Kane, NZ Mint’s head of bullion, said local investors were keen gold buyers because the New Zealand dollar was still climbing against the U.S. dollar.
“That’s more about the U.S. dollar dropping than anything else,” he said. “The gold price is surging against the U.S. dollar, but so too is the kiwi, so in kiwi dollar terms the gold price has actually been fairly static,” Mr O’Kane said.
In the bigger picture, concern continues to mount over the U.S. dollar’s status as the world’s chosen reserve currency.
Mr O’Kane said gold’s break over $US1300 happened much quicker than many expected. The next price barrier for the precious metal was expected to be at $US1320, then $1350, he said.
On the downside, investor support was expected to kick in at $US1280 then $US1270, Mr O’Kane said.
“Realistically, we may see a small pullback tonight on profit-taking, because it’s been a fairly hefty jump.”
Some commentators have that suggested that gold could hit $US1500 by the year’s end. Now that US$1300 has been breached, it’s a prediction that is looking more likely, Mr O’Kane said.