Serj Panchuk
This morning in Honk Kong gold hit a new price record, $1704,80/oz. At the same time Asian markets declined. According to numerous experts, it happened because Standard & Poor’s had cut the US credit rating from AAA down to AA+ and had set a negative forecast for it.
This unprecedented event made investors focus on gold as a safe haven asset. Some experts say that in the short run gold will make another price record ($1725/oz).
In 2010 the precious metal gained 30%. During the first 6 months of 2011 gold gained 5.3%, in July it was 8.5% increase.
According to the Department of Commodity Trading, , there is another factor that supports gold prices: Q4 is usually the time of higher demand for golden jewelry. That is why the demand for physical gold in August increases while there is no increase in the market supply. Eventually, it will end up in higher gold prices.
Serj Panchuk
