Gold prices have risen more than four percent this month to reach an all-time high of US $1,301.30 per ounce on Friday with silver reaching its highest selling price in 30 years at US$ 21.41 per ounce.
Gold and silver prices are expected to stay high after a week of record prices, with the Federal Reserve indicating it is considering further quantitative easy, despite this undermining the position of the dollar.
Deutsche Bank analyst Daniel Brebner surmised that the flow of new money witnessed this week has raised expectations for inflation in the longer term. Couple this with the high sovereign risks seen in Portogal and Ireland at the moment, which according to Brebner will prompt the European Bank to action, will also increase the likelihood of “significant moves in gold and silver over the next quarter.”
Gold prices also rose compared to the Japanese yen after the yen slipped in value following talk of the Japanese government mounting a second intervention to stem the gain in currency. The US dollar also lost value against a basket of six currencies, which in turn makes gold more attractive to investors.
Both gold and silver prices are poised to gain, as investor interest rallies around the precious metals. Other metals, such as platinum and palladium, are also set to increase in value as portfolio managers look to metals as a way to make up losses gained in a less-than-impressive first half of the year.
