Gold prices settled at a record inflation adjusted level price to an almost two week high trading around the $3,320 for Wednesday. This increase reflects a major move higher with gold holding above that key $3,300 level. Many analysts are calling for the gold market to soar to new heights, supported by a perfect storm of economic conditions.
On Wednesday, in the midst of the Asian trading session, gold prices reached a one-and-a-half-week high. This rally seems to be an extension of a three-week-old uptrend, signaling a definitive change in investor sentiment. Gold’s price continues to firm on to intraday gains. Market observers are noting that this trend is largely fueled by acute US fiscal pressures and most recently, the downgrade of the US government’s sovereign credit rating.
This spike in gold prices has happened at the same time as rising fears of recession. Investors often consider gold a safe-haven asset during periods of uncertainty, driving demand higher amid concerns over fiscal policy and economic growth.
“Gold price hits nearly two-week high around $3,320 area; seems poised to climb further.” – www.fxstreet.com
Analysts point to the effect of China’s economic slowdown on the gold market. This economic slowdown has pushed gold prices higher. The interaction of global economic uncertainty and positive investor sentiment is an interesting double-edged sword in investment markets today.