Gold shoots to record high as worry about Europe's debt crisis are raised. [CFP]
Spot gold jumped to an all-time peak in Shanghai yesterday as investors turned to safer assets on concerns about Europe's debt crisis and debt-ceiling talks in the United States.
The price for immediate delivery of 99.95 percent purity gold, the benchmark cash contract, surged to a record 331.70 yuan (US$51.30) a gram, before closing at 331.52 yuan on the Shanghai Gold Exchange yesterday.
Bullion of 99.99 percent purity hit a record 331.85 yuan a gram, and closed at 331.55 yuan, the exchange said.
"Investors' appetite for bullion got a boost in China in recent weeks with global gold prices hitting a new high amid concerns over uncertainties in the US economy and eurozone debt crisis," Judy Zhu, an analyst at Standard Chartered, told Shanghai Daily yesterday in a phone interview. "China's inflation is expected to hit peak this month, which drove investors to choose bullion as a safe storage of value."
US investment bank Morgan Stanley has forecast that "there is little to prevent gold prices from touching fresh record highs in the coming weeks" because the outlook for the US dollar looks bleak in the coming quarters while real interest rates continue to be low.
Zhu forecast that gold prices will continue to move up over the middle- and long-term.
Gold prices have jumped sharply since July 4 as the eurozone and US debt worries lingered. Republican and Democrat lawmakers in the US have been trying to craft a plan that could avert an unprecedented government default, which might impact global markets and drag the world's biggest economy into a recession again.
Gold is up 11 percent this year, heading for an 11th straight annual gain - the longest winning streak since at least 1920 in London.
