Commodities – Gold passes $1,700 for first time in history

Important: This page is part of archived content and may be outdated.

Gold jumped to over $1,700 an ounce today for the first time in history after the United States top notch AAA credit rating was cut by Standard and Poor’s, fuelling investor concerns about a new recession and a global growth slowdown.

Just this year alone, price of spot gold have soared as the sovereign debt crisis in the euro zone and the recent U.S. debt issues boost demand for the precious metal as a protection of wealth.

Usually, in times of crisis, the dollar is also perceived as a safe haven investment, due to its high liquidity, however, today, even the dollar is shunned and gold is the only safe haven asset at the moment as it does not “belong’ to any country and cannot be controlled by any government or policy makers.

Gold prices are likely to remain at elevated levels as the outlook for the U.S economy does not look good at the moment, and the euro zone debt issues are still not out of the woods either despite the willingness of the European Central Bank to buy Italian and Spanish debt.