Gold Passes $1,600 as Concern over Europe and the U.S. Persist

(IDEX Online News) – A mixture of speculation and economic woes in the U.S. and Europe propelled the price of gold past a historic $1,600 per ounce. Debt concerns in the financial markets are driving demand for the safe-haven commodity.

“The current worldwide macro-economic scenario of competing inflationary and deflationary forces combined with sovereign debt contagion in Europe and the federal debt ceiling impasse in the US continues to be a positive one for gold,” according to Marcus Grubb, Managing Director, Investment at the World Gold Council.

“In Europe, sovereign debt contagion is once again being priced into bond markets with Italian and Spanish spreads over Bunds rising to multi-year highs.  In the U.S., weak labor and housing markets, high energy costs and the prospect of weak growth are adding to market uncertainty,” Grubb added. 

The price of gold has climbed by more than 38% in the past year and silver is up more than 130% despite a sharp drop in May. The price of platinum, the third precious metal commodity, has increased by just 16.8% in the past year.

The price of diamonds keeps breaking records too. On Tuesday, the IDEX Online Polished Price Index was just shy of 147, after three days of holding above 147.5.