As fears mount that global markets are no longer safe, investors are turning to gold as an investment, which has resulted in its price reaching a new high. As of Friday morning, the price of gold had jumped to as high as $1,881 per ounce, which marks a 7 percent increase this week alone.
Gold Price Increases 25 Percent since July
Gold has been on an unbelievable run over the past year, with prices skyrocketing over a very short period of time. In June 2010, we reported gold had then reached a record high. At the time, the price per ounce was $1,246.50.
Since then, the precious metal has not only soared in a week’s time, it has jumped a whopping 25 percent since July of this year. Increases are expected to continue in the days, weeks and months to come as long as the global market remains a source of concern for investors.
Global Markets Continue to Struggle
Markets around the world have responded over the past few days to concerns that the U.S. economy and European banks are both in trouble.
Some believe the U.S. economy could be headed toward another recession as unemployment soars and companies like Bank of America, Sears and even the U.S. Postal Service continue to announce layoffs.
In Europe, the ongoing debt crisis and concerns that it will have a negative impact on banks is causing investors to pull away from bank stocks and push the market into a downward spiral.
Morgan Stanley along with other analysts expressed their own concern on Thursday, noting the U.S. and the 17 countries that use the euro were “hovering dangerously close to a recession.”
Concerns have even been expressed that localized financial troubles could spread to the global economy, resulting in a worldwide recession. Because of these concerns, gold is expected to continue its price increase for the foreseeable future.
The economy has the red hot, hot red, meltdown blues. Until there is a real, unified effort by both parties in the U.S. and by the EU to create jobs, nothing much is going to change. How could it?
Meanwhile, instead of everyone scurrying into bomb shelters as they did in the 1950s and 60s, all the money is being sucked into “safe havens.”
There is money to be made, even though now the faint of heart will fade away from the gold market. But, personally, I think there I still a LOT of room at the top.
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