The price of gold per ounce has exceeded $1,580 per ounce Wednesday morning. Waning confidence in the dollar and other fiat currencies has led to a worldwide gold investing trend. Upon news that the Federal Reserve may begin another quantitative easing round, investors rallied around gold as a reliable store of wealth.
The Fed’s continuous printing of more money leads to cheap cash that burns quickly. Gold, on the other hand, provides lasting value that a growing number of people around the world are depending to secure purchasing power.
As Carlos Sanchez, commodity analyst with CPM Group, said, “Investors will continue to buy gold, especially long-term investors, as a hedge against uncertainty over the economic prospects for the next couple of years. Overall, we expect gold prices to remain around current levels going forward and trend higher for the remainder of the year.”
Another factor contributing to the all-time record price of gold per ounce is spreading debt in Europe. EU finance ministers are meeting again to discuss how to sort out Greece’s financial crisis. Meanwhile, other countries in Europe are being dragged down into economic debt. In addition to Greece, the domino effect has caused Portugal and Ireland to have their credit rating downgraded. Spain and Italy are expected to follow the same downfall if effective policies aren’t set up soon. As economist Karen Barlow said, “It's feared the large European economies of Spain and Italy may soon also require bailouts.”
Other countries with growing economies are working towards financial independence by purchasing precious metal commodities such as gold. The Central Bank of China has purchased large quantities of gold and is recommending that Chinese citizens do the same as a hedge against global inflation. Sheng Laiyun from the Chinese National Bureau of Statistics said, “Although part of the indicators registered a reduction, the overall economic performance of China is good and China is shifting from fast development driven by policy to self-driven, healthy development.”
Since there are numerous factors supporting the price of gold per ounce, this precious metal is being viewed as a reliable investment. To take direct control of gold assets, many investors are opting to purchase physical gold bullion bars (ingots) or coins. The worldwide desire to own gold assets has created shortages at the United States Mint for popular coins such as the gold American Eagle. However, there are plenty of opportunities to own gold in various forms, weights, and purities.