Gold Continues to Spike
From sovereign nations to hedge funds to individual investors - everyone wants to own gold right now.
The reasons for purchasing gold vary. Some nations are looking to diversify their forex holdings. Some investors are worried about the state of the global economy and want to hedge against inflation. Some investors just want to buy gold because it is going up.
Whatever the reason (or reasons), gold is soaring right now, and looks to have no near-term ceiling.
Gold is currently trading at around $1,185 - $1,190 per ounce. The precious metal is up dramatically from a year ago, and has nearly tripled in the past six years.
As mentioned, everyone is piling into gold right now.
India recently purchased 200 tons of gold from the International Monetary Fund and wants to buy more.
Sri Lanka recently purchased 10 tons of gold from the IMF as well.
China continues to add to their holdings in an effort to diversify their massive forex holdings.
The U.S. Mint recently suspended sales of 2009-dated American Eagle Gold Bullion coins due to strong demand. Sales of the coins are up 83% compared to last year.
Pension funds are looking to hedge against a weakening US dollar. Hedge funds and investors are speculating that the price of gold will continue to soar, given the precarious state of many major economies across the globe and the continued strong demand from countries such as China and India.
In short, gold is rising due to many different reasons, and stepping in front of the runaway train seems like it could be a painful proposition at this point.
Gold is still well off of its inflation-adjusted highs of approximately $2,250 per ounce, but you really do have to wonder how high it could trade over the next year or two, given all of the momentum that it currently possesses.
Filed under: General Knowledge