Investors stunned as Gold price accelerates above $1,900

august 1 month gold - Investors stunned as Gold price accelerates above $1,900
This chart shows the breach above $,1900 - with gold remaining above $1,850

In a development that has stunned investors and market-watchers worldwide, spot gold has hit yet another all-time high at over $1,910 an ounce on Asian markets.

Though several financial institutions had revised their end-of-year estimates to higher figures in past months, the seemingly inexorable rise of gold has caught many off guard. Gold has risen particularly sharply since June, gaining ground as both the US and Eurozone economies floundered after a period of slowdown for the metal.

A combination of the prospect of a devalued dollar through further quantitative easing and a poor outlook for growth in Western economies appears to have driven the latest rally. The immediate effect has been that banks have hastily upped their forecasts for the end-of-year gold price.

JP Morgan suggested that gold might reach $2,500 an ounce in spot trading, whereas HSBC felt that gold would average more than $1,700 an ounce for the remainder of 2011. The bullish atmosphere that banks now find themselves in is best summarised by Swiss bank UBS, who stated; “From the potential for quantitative easing in the UK, to the reality that U.S. rate hikes are more than 12 months away, to continuing central bank diversification toward gold, there’s no shortage of positives in the months ahead”.

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