(Image Source: Wall Paper Times)
BY CHARLES STANLEY
ANCHOR JIM FLINK
You're watching multisource business news analysis from Newsy.
Up, up and away. Gold prices are soaring as investors grow fearful around the globe. Monday gold reached record highs – topping 1,700 an ounce.
“The price of gold is going through the roof!” (Fox News
“Gold above 1,700 and more than 50 bucks on the session so far.” (CNBC)
“We saw what gold is doing, it’s at a record high. Its doubled in price in just the last couple of years.” (MSNBC)
As the selloff continues investors are dumping domestic stocks – and buying gold and bonds. Analysts say gold is showing its power as a safe haven for investors - who are trying to weather the storm. According to the Wall Street Journal, banks are following suit as well.
“Investors are not alone in favoring greater exposure to gold. The yellow metal has garnered more attention from central banks in recent months with South Korea, Thailand, Mexico and Greece all adding to their gold reserves.”
Despite gold being at an all time high – a price-point savvy investors usually avoid - analysts for CNBC and MSNBC say its still tempting.
“Having some cash, some silver, and some gold is called for.” (CNBC)
“I think a lot of people are looking at it saying, ‘you know two years ago I thought it hit an all time, or two months ago I thought it hit an all time high.’ So boy the temptation is pretty strong.”
"I completely agree.” (MSNBC)
While the bandwagon is on the move – some would rather sit back and watch. A market analyst for ETF Daily News – predicts the gold run is another bubble bound to fall. He points to the recent housing market crash, and the gold sell-off of the early 80’s as examples of what goes up must come down.
“The truth is no one can tell you where gold will be in a month or a year. Still, it wouldn’t hurt to heed the words of Mark Twain: “History may not repeat itself. But it rhymes.” …If you are piling into gold and silver now – or if it makes up a quarter or more of your portfolio – you are truly living in Las Vegas.”
But if the gold rush of 1980 repeats itself, gold may still have a long runway up. Gold sits at roughly 1,700 an ounce – many are asking how high can it go? Bold predictions put the number at as much as 4,000 an ounce. An article in the International Business Times explains why.
“Remember that in 1980, gold more than doubled in value in less than two months, and that was in an economic situation much less dire than this one. Keep in mind that it was not just the US debt that was downgraded Friday. It was a downgrade on the issuer of the most important currency in the history of modern economics. … Most analysts no longer believe gold can top out at $2000 per ounce. The consensus is building, that $2000 gold is probably just the beginning.”
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Transcript by Newsy
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