Tuesday, April 19, 2011

Gold extended its record-breaking rally

The gold reached the record of 1500 dollars an ounce, It has never been a similar rise in the financial markets. With this crisis and expressed fears about the U.S. deficit and debt in Europe, investors prefer to acquire more gold to slow the risks.

It is obvious that holding gold resources does not yield large monetary benefit, but may qualify its holder as a good asset. In times of financial instability, investors are constantly looking for safe way to invest. The gold is the best immediate alternative for them. Hence this is the reason for this recorded historic outbreak in gold rate.

Since most of the global market is unstable this trend may continue and hence more procurement by the investors will lead to more price rise. In our neighboring country China inflation was reached 5.4% as on March 2011and hence their banks are required to increase the reserve and hence there is no immediate down trend in the price of yellow metal. The current crisis and un rest in African and Middle East countries are another main reason for the price raise of the yellow metal.

In relative point of view; the prevailing price of Gold is not expensive compared with the price of 1980 considering the inflation in price in mind. Even the poor man’s gold also rose to certain extent and the metal traders highly praise this metal.

However, all metals are not aware of such enthusiasm from buyers. The platinum price has not changed while that of palladium was down 6%. Their courses have been affected by the earthquake and tsunami in Japan.


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