As some are beginning to express skepticism that the rally in gold prices and exchange traded funds (ETFs) couldn’t possibly last, gold goes ahead and touches on another new record today.
Gold futures hit new record highs in trading today, soaring above $1,150 an ounce on weakness in the dollar and gold’s appeal as an “alternative currency.” Matt Whittaker for The Wall Street Journal says that in additional to seasonal jewelry buying, gold’s demand is feeding on itself. As the price goes higher, it entices more investors to buy bars and coins for themselves. (Read about the new gold miners ETF).
Where gold goes from here is anyone’s prediction.
The case for a correction: some analysts think gold is overbought, and that a correction could be just around the corner. At the moment, says Rediff Business, gold is getting support from a weak dollar.
The case for more: John Wasiliev for The Age reports that there are numerous near-term factors supporting the price of gold, he says, all underpinned by a volatile but generally depreciating U.S. dollar. Chinese and Indian investors are also creating plenty of demand for the precious metal. (Other reasons gold prices could inch higher yet.)