The price of gold reached on Monday its highest during the last four months level of $1,676.45 per troy ounce (31 grams) amid fears of investors for growth of the debt crisis in the eurozone.
Through investing in precious metal investors want to protect their investments from inflation, which they associate with the anti-crisis measures taken by the authorities of the European Union.
Meanwhile as of mid-day Tuesday December gold futures on the New York stock exchange Comex dropped in price by 0.7% - to $1,663.90 per ounce. Experts attribute this to investors' expectations of the forthcoming conference of the American bankers on Friday in Jackson Hole, where the head of the U.S. Federal Reserve Ben Bernanke will make a speech.
According to HSBC analyst James Steel, if Bernanke "will not say anything about further easing of monetary policy, the gold market could fall very sharply." "At present, the general commodity prices support the gold price, but cheaper oil and grain can lead to similar consequences for the precious metal," – he was quoted by MarketWatch.
Global demand for precious metals remained relatively stable in financial terms. In the second quarter of this year it amounted to $51.2 billion compared to $51.6 billion during the same period in 2011.
In 2011, the increase in gold prices reached nearly 10%, but in the second quarter of this year the cost of metal has fallen by 4%.
Experts call the debt crisis in Europe and the acceleration of inflation in different countries as main factors supporting the value of gold, which is regarded by investors as a more reliable alternative to volatile currencies and subject to severe fluctuations in shares of companies.
Alex Shishlo, Editor in Chief of the European Bureau, Rough&Polished
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