Gold prices nearly touched $1,830 an ounce Thursday on concerns over the health of the global economy and after Venezuela said it plans to nationalize its gold mining industry.
SPDR Gold Shares (NYSEArca: GLD), which holds assets of $74.6 billion, rose 1.5% and recorded a new 52-week high.
“Investors are running scared into gold because of the persistent problems and recession-like performances in Europe and United States,” said Jeffery Nichols, senior economic adviser at Rosland Capital, in a CNNMoney report.
Morgan Stanley lowered its global economic forecast and cautioned the U.S. and Europe are close to a recession.
In U.S. economic data, the Philly Fed said its manufacturing index plunged in August, while data on inflation was hotter than expected.
Venezuelan President Hugo Chavez said he plans to return billions of dollars in gold reserves currently held in the U.S. and European banks back to his country’s central bank, Fox News reported.
“Option dealers are buying a lot of calls and they are very bullish. With the stock markets selling off, people are hedging their portfolio with gold buying,” Jonathan Jossen, a Comex gold options floor trader, told Reuters.
SPDR Gold Shares
Full disclosure: Tom Lydon’s clients own GLD.