Gold for June 2011 delivery hit an intra-day high of $1,500.50 an ounce while April closed at $1494.50, both records. Gold futures for June were the most-traded contract on the New York Mercantile Exchange’s COMEX division on Tuesday.
The bullish gold market has been on a tear for months as investors continually turn to the metal as what they consider a safe investment amid fluctuating paper currencies, the weakening U.S. dollar, and growing debt and inflation concerns.
Investors flocked to gold as the U.S. dollar lost value against 12 of 16 major international currencies, Bloomberg News reported.
The euro’s appreciation amid rumors that the European Central Bank would raise interest rates and oil jumping to higher than $108 a barrel have contributed to gold’s gains.
“The modest recovery in oil prices and the modest comeback in the euro have all added to gold’s allure,” HSBC New York analyst Jim Steel told the Wall Street Journal.
Interest in gold also grew on news that S&P downgraded the U.S. credit rating from “stable” to “negative” over budget deficit and long-term government indebtedness worries on Monday.
The gold market could continue on its torrid pace as economic conditions stay murky.
“It’s a round psychological number and the market wants to smash through it,” Heritage West Financial analyst Ralph Preston told the Journal.