The yellow metal has soared to a new record above $1,600 an ounce. It has also made new highs in euros and pounds, exceeding €1,140 and £1,000 respectively. It's been "a perfect storm for gold", says FXPro.com. Europe's stress tests have failed to temper concerns over European banks, and the Fed has signalled that more money printing (QE3) is a possibility.
Investors have also fretted that US politicians wouldn't agree on raising the debt ceiling, causing a credit-rating downgrade and a potential global financial meltdown. Meanwhile, European leaders' inability to agree on a new rescue package for Greece has started to fuel fears of a collapse in the single currency. "If people seriously thought that there was a good chance that the euro would not survive, the associated flight to the safety of gold could easily see prices surge well above $2,000," says Capital Economics.
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