The Price Of Gold Reaches 16-Month High

By Stewart Douglas

The price of gold has reached its highest price in over a year, as a result of investors buying gold to weather the current storm on world exchanges. 

On a day in which the number of jobs in the US fell significantly in the face of positive analyst expectations, which has led many to fear that the US economy could now be starting to feel the effect of the sub-prime situation.

The price of spot gold was up beyond $700, or £350 per ounce in the UK, the highest level in over sixteen months, with investors looking for a more stable return for the immediate future.  With stock markets continuing to trade in turmoil, investors have turned in their droves to a more stable investment strategy.

The sub-prime market has been the source of significant unrest in stock exchanges across the globe.  Investors have traded tentatively even on positive days with markets finely balanced.  With weeks of consecutive negative indicators from the US economy, investors have apparently avoided the stock exchanges altogether in favour of a more stable investment.

Additionally, gold seems a good investment at a time when the dollar is riding low against other world currencies, and ongoing political tension in the Middle East which has seem oil prices similarly rise in recent months.

From a low-point in July, the price of gold has risen by just under 9%, emphasising the extent of lack of confidence in stock markets.

Stock markets were today badly affected with the number of jobs in the US economy falling, despite widespread thought that jobs would actually rise substantially.

With the sub-prime situation continuing to have an effect, it looks likely that the price of gold will continue to rise over the first half of next week.