Skip to comments.Gold nears record high as some investors seek cover
Posted on 05/02/2010 6:35:20 PM PDT by Jet Jaguar
Rather quietly, gold once again has been playing its classic role of a haven in times of rising uncertainty.
Near-term gold futures in New York jumped $11.70 to $1,180.10 an ounce on Friday, the metals highest level of 2010. The price now is within 3.2% of the all-time closing high of $1,217.40 reached on Dec. 3.
The SPDR Gold Trust exchange-traded fund, designed to track bullions market price, is up 7.5% year to date to $115.36 a share, beating the 7.1% return of the Standard & Poors 500 index (including dividends), after the S&P index lost 2.5% this week.
Silver and platinum also have rallied sharply since early February, to $18.61 and $1,745 an ounce on Friday, respectively.
Some investors and traders clearly are turning to precious metals as a hedge against Europes government-debt crisis. Gold has gained 3.3% just in the last six trading sessions, after Greece formally requested the financial bailout offered by the rest of Europe and by the International Monetary Fund.
Well, maybe not 100%. The growing damage to the reputation of Goldman Sachs Group, Wall Streets preeminent investment bank, also may be driving some investors to seek a hedge against the possibility that Goldmans woes could lead to a new chapter in the financial crisis that began in 2007.
Reports on Friday said Goldman has become the target of a criminal investigation by the Justice Department, driving the banks shares down 9.4% for the day -- and wiping out more than $8 billion of the firms market capitalization.
But as a buffer against calamity, gold hasnt been foolproof since the Great Recession began. In the financial-system meltdown of September-to-November 2008 the price dived from $909 to $705 over seven weeks as investors sold anything they could to raise cash.
(Excerpt) Read more at latimesblogs.latimes.com ...
I have some gold and my average buy price is around $600. That includes a bit at $280 or so.
Bought gold when it was in the high $300.00 low $400.00 range. Not a bad investment, except I should have bought a lot more at that price level. :o)
FWIW, I myself will be lightening up just short of $1200 gold. I KNOW it ain’t gonna go straight to new highs, and except for the Goldman Sachs stumble, it’s been on a rampage for over a month. Time for a little “consolidation” IMO.
Mail me to get on or off the Free Republic Goldbug Ping List.
Gold has been moving within the range of $1070 and $1170 for last several months. Probably by the end of this year, $1,200 could become the new normal around which its price fluctuate.
Reports are trickling in the the Justice Department is looking into possible criminal activity and price fixing in the silver market by the large bullion banks...
I saw an article at zerohedge on that, but decided not to post it. They’ve jumped the gun a couple of times on other things, and even the “money” DoJ quote there was IMO little more than “we’ll get back to you” boilerplate.
And even if they do get serious, I have no doubt whatsoever that we would first see another 40% drop in silver a la summer 2008 as a deliberate and coordinated effort with JPM et al to close out their short positions.
Thanks to jiggyboy for starting a gold ping list, very interesting.