Posted November. 27, 2009 08:31,
The international price of gold yesterday closed at just under 1,200 U.S. dollars per ounce (31.1 grams), as the value of the precious metal has surged due to higher demand amid the weakening of the dollar.
On the New York Mercantile Exchange, gold futures for December delivery soared 21.2 dollars to close at 1,187 dollars per ounce. The price of gold traded on the exchange grew for the ninth consecutive trading day, setting a new high every day.
The official price of gold yesterday was 34.2 percent higher from 884.30 dollars late last year, and has gone up 14.1 percent this month.
Gold has surged apparently due to the weakening dollar, not because of an imbalance between supply and demand. The Japanese yen also rose to 86, a 14-year high, against the dollar yesterday.
The price of gold soared after media reported that the Reserve Bank of India, which had recently bought 200 tons of gold from the International Monetary Fund, will purchase more gold. With the greenbacks status as the worlds key currency waning, central banks worldwide are aggressively trying to purchase the precious metal.
Unprecedented gold investment by hedge funds and individual investors has also raised the price of gold. Commodities investment giant Jim Rogers forecast last month that gold might reach 2,000 dollars per ounce in five to 10 years.
Experts agree that gold will hit 1,200 dollars per ounce soon, but are mixed over how long the price surge will last.
Buoyed by golds surging price, other materials such as silver and copper have also seen their values jump. If governments begin raising interest rates to reduce liquidity earlier than expected, the prices of raw materials are highly likely to collapse.
On the London Metal Exchange, the price of silver reached 18.6 dollars per ounce, soaring a whopping 73 percent this year. Over the same period, the price of copper skyrocketed 138 percent.