Why Gold prices high, for over US$1,600 an ounce ; Gold prices reached a record high, hitting the US$1,600 per ounce mark for the first time, Prices were pushed up as United States politicians failed to reach an agreement on raising the debt ceiling and amid continued concerns over Europe's sovereign crisis.
And analysts said that the precious metal is likely to see more upside this week as market sentiment remains cautious.
Investors are increasingly looking to gold as a safe haven as the US dollar, pound sterling and the euro continue to devalue against stronger currencies such as those of Canada, Australia, Norway and Switzerland.
Meanwhile in the US, talks to raise the debt ceiling continued without signs of a compromise with ratings agencies warning of downgrades to the US triple A rating.
Amidst an environment of uncertainty, gold continues to benefit as a safe haven asset. A sustained breach of US$1,600 could see gold surge higher for the 11th consecutive session,
The broker said that this has happened for three main reasons - the weakness of the US dollar, the political instability in gold exploring/producing countries, and a general aversion to equities as an asset class. We expect gold prices to continue to rise,.
We believe there are various factors that have contributed to this rapid rise, and we believe these same reasons will continue to keep gold prices high for some time to come."
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