Gold futures hit record high, investors urged to jump in

Polish gold bars of varying sizes.

Gold futures hit a new record high today at over $1,400 an ounce. (Photo Credit: CC BY/Giorgio Monteforti/Flickr)

There is a definite connection between currency values and the price of precious metals, and if today’s movement on gold futures is any indication, the world is experiencing a major shift. According to Marketwatch, Gold for December delivery went up $7.20 per ounce to an all-time high of $1,405 early Monday on the Comex of the New York Mercantile Exchange. It soon peaked at a high of $1,407.20 per ounce.

Gold futures began the day on downward slope

Trading began Monday with a loss of as much as $10 from Friday’s closing price on gold futures ($1,397.70 per ounce). Not coincidentally, the currency value of the dollar rose. But dark clouds of European debt – particularly in Greece, Ireland and Portugal – massed on the horizon, giving gold prices, silver prices and even copper prices an historic lift.

The Federal Reserve’s bond buying excursion spun the market like a top

The recent move by the Federal Reserve to buy up $600 billion worth of bonds over the next eight months spiked investor interest in selling paper currency and shifting toward the precious metals end of the market. Yet currency values are not in complete free fall as yet, reports Marketwatch. The U.S. Dollar rose 0.5 percent against rival paper currencies. The euro, however, experienced a marked decline, thanks to bonds from Greece, Ireland and Portugal came under performance pressure.

Re-instituting a gold standard

World Bank President Robert Zoellick has suggested that the re-institution of the gold standard should be a topic of serious discussion at the upcoming G20 conference in Seoul, South Korea. “Employing gold as an international reference point of market expectations about inflation, deflation and future currency values” could go a long way toward establishing a practical economic yardstick, said Zoellick in a recent Financial Times op-ed piece.

James Cordier, a portfolio manager at agrees. A global gold standard could “stabilize gold and turn what is still a thin market into a more orderly one.” Not only that, but currency values would benefit, as it would be tied to something to something more tangible.

Silver and copper prices also shot up

Marketwatch reports that silver prices went up toward $27 an ounce. Meanwhile, copper prices rose to $3.96 per pound in December delivery figures.



Is it government manipulation – or luck?

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