Exchange traded funds that invest in gold were rallying to new all-time highs Monday after Standard & Poor’s downgraded its rating on U.S. debt, while in stocks the Dow fell over 400 points.
“S&P’s unprecedented downgrade to the U.S. government debt rating on Friday, despite the U.S. debt deal, has driven the gold price to a new record level as investors have poured assets into perceived safe havens,” ETF Securities said in a precious metals report Monday.
“Investor concerns about potential currency debasement were exacerbated by the European Central Bank’s renewed bond buying program and Japan and Swiss central bank intervention in foreign exchange markets to weaken their currencies,” the analysts wrote.
ETFS Physical Swiss Gold Shares (NYSEArca: SGOL) was up 3.5% in afternoon trading Monday as President Barack Obama addressed the S&P downgrade and financial markets. Gold futures traded over $1,720 an ounce. [Gold, Silver ETFs Back on the March]