Highest gain for four weeks on fears of disintegration of Euro zone
Monday, Jun 7th, 2010
Gold futures have surged to a four week high today as the Euro continues to flounder and investors seek a safe haven.
Gold futures for delivery in August rose $23, almost 2 percent, to $1,240.70 at 12:01 p.m. on the Comex in New York, and could jump even further by the close of the day.
The surge constitutes the largest gain for gold since May 6th.
“People are still buying gold for currency protection,” said Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois. “People should remember that the euro was once at 85 cents and I see no reason why it shouldn’t go there again.”
“Everybody is scared that the recovery simply isn’t going to happen,” Kaplan added.
Earlier in the day the Euro fell below $1.19 for the first time in four years, owing to Euro zone credit contagion fears and worries about a Hungarian debt crisis.
The single currency is down more than 16 percent against the dollar so far this year.
Last week it was revealed that the Central Bank of Iran is set to dump a whopping 45 billion euros in exchange for gold bullion and dollars as Gulf states also prepare to flee from the ailing single currency.
Gold has hit record highs against all major currencies in the last few months as it remains the only true store of wealth in times of economic chaos and depreciating fiat money.
Demand for the precious metal is once again hitting fever pitch as the U.S. Mint announces that it has sold 190,000 1-ounce American Eagle gold coins in May, the largest amount in a single month for over 11 years.
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This article was posted: Monday, June 7, 2010 at 10:23 am