Thursday, May 13, 2010

Gold Hits Fresh Record on Inflation Fears


Gold prices continued to set fresh highs on Wednesday, as fears about rising inflation kept the yellow metal in demand.

After overtaking its December high of $1,226.10 an ounce on Tuesday, gold reached a fresh peak of $1,243.90 in early European trade.

Gold bugs have been snapping up coins, particularly in Germany and Switzerland, amid fears over the potential inflationary impact of the European Central Bank’s decision to buy eurozone government bonds to tackle the region’s debt crisis.

Edel Tully, precious metals strategist at UBS in London, said that the €750bn eurozone rescue package agreed on Sunday night had done little to slow demand for gold. “The continuation of this heightened appetite after the bail-out was announced shows that these fears have not been allayed.”

Gold prices in euro terms also hit a fresh all-time high of €981.49 an ounce, up 28 per cent since the beginning of the year.

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