Spot gold today hit a high of $814.10 an ounce and closed above $800 levels. This overtook the previous high price of January 1980. Gold and Oil prices are surging since the sub-prime woes are affecting the stock markets and metals are seen as a safe place for investment. Yesterday Citigroup announced that it could have to write-down about $11 billion due to bad mortgage.
The record high for gold in Nymex is $875 set on January 21, 1980.
Some causes behind the current spike in gold prices are:
In 1990 gold prices soared because:
Though inflation adjusted price of gold is nowhere near the highs reached in 1980s still the trend seems to be intact upwards and may very soon cross the all-time nominal high price.
The record high for gold in Nymex is $875 set on January 21, 1980.
Some causes behind the current spike in gold prices are:
- Low interest rate (Fed cut the rates last week to 4.5%)
- Sub-prime crisis creating uncertainty in stock markets
- Dollar is weak against other currencies
- Crude oil is at all time high
- Turkey-Kurdish conflict
- Supply concerns due to union's problem in South Africa after several deaths in mines.
In 1990 gold prices soared because:
- Iranian revolution (1979)
- Russia's intervention in Afghanistan
- Strong oil prices
- High inflation
Though inflation adjusted price of gold is nowhere near the highs reached in 1980s still the trend seems to be intact upwards and may very soon cross the all-time nominal high price.
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