Gold continued advancing last week to reach to record highs and soared a little under $40 on Tuesday amid rising concerns from the European debt crisis and signs of slowing growth from the US economy.
Underpinning the yellow metal‘s rapid rise was news that the Bank of Korea bought 25 tonnes of gold in the previous two months for the first time since the 97/98 crisis.
Many analysts predict higher prices for gold as it continues to be sought after as a refuge from depreciating currencies and a safe haven from the global economic downturn. Market observers expect investor flows to remain strong and gold‘s uptrend to continue. Investors are looking for a safe haven and currencies like the Swiss franc and yen have also declined recently, so investors have very few places left to put their funds.
Gold has surged over 12% since its recent pullback to $1487 on July 1 and, while it may correct a little in coming days, analysts don‘t expect safe haven demand to diminish in the near future due to the European debt crisis and the faltering US economic recovery.
Moreover, there are still uncertainties over the S&P rating agency downgrade of the US from longstanding AAA rating.
