With the price of gold reaching “another all-time high” today at $914, as the BBC points out, it has increased 50 percent over the past year. The weaker dollar has been making a contribution to the rise, making the precious metal more affordable to holders of other currencies.
Other contributors, the broadcaster quotes analysts on its website, are “expectations of further cuts in US interest rates, high oil prices, and […] speculative trading”.
Robin Bhar, metals analyst at UBS Investment Bank, says it is “human nature to buy into a market that is already showing strength” and that “most fund managers have a herd mentality and they are just attracted to gains”.
For this reason he advises against taking a major position in gold at this moment: “Gold could go higher still, but we don’t think this is a right time for buying.”
Darren Heathcote of Investec Australia in Sydney also sees “room for gold to go higher”. “We are in an uncharted territory, really”, he concludes.
The question of course remains whether the statements of analysts can be taken at face value, or whether they have their own agenda.
It is definitely worth taking a more differentiated look at the various options for investing in gold. Obviously there are going to be differing criteria for e.g. gold coins or gold jewelry, on the one hand, which can be acquired in small volumes if the right opportunity comes up and whose value will be affected by other issues such as age or rarity, or the shares of gold mining companies on the other, which will to a great degree be affected by the individual circumstances of the particular entity involved. Gold bars and gold ETFs are another thing altogether.
Meanwhile other precious metals are also up, with platinum reaching $1,587 an ounce in Monday trading and silver touching a 27-year high of $16.58.
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