Prices paid for gold have advanced to a fresh record high and are set for their third consecutive weekly gain as concern about the strength of the U.S. dollar and European sovereign debt woes boosted demand, according to Bloomberg. On Thursday, gold for immediate delivery climbed to the highest level on record, $1,512.47 per ounce, before easing slightly to a level that correlates with a 1.4% weekly increase. June-delivery futures also hit a record $1509.60 in trading on Thursday, and the exchange is closed on Friday for a holiday.
Chae Un Soo of Korea Exchange Bank Futures said, “The weak dollar is having the most influence on gold at the moment,” which comes on the heels of the Standard & Poor’s downgrade of the outlook for U.S. sovereign debt earlier this week from stable to negative. The analyst continued, “The market is getting more jittery now that we have sovereign-debt concerns about the U.S. in addition to Europe and the Middle East problems, which increasingly boosts safe-haven demand for gold.” Hiroyuki Kikukawa of IDO Securities also noted, “Overall trade for gold and other precious metals was extremely thin due to the market holiday.”
