Gold has reached an all-time high in the New York futures market, a sign that many investors do not see an early end to turmoil in world markets and the global economy.Gold's role is one of a "safe haven" during times of acute stress in markets,
Gold has reached an all-time high in the New York futures market, a sign that many investors do not see an early end to turmoil in world markets and the global economy.
Gold’s role is one of a "safe haven" during times of acute stress in markets, which are grappling with the debt crisis in Europe and indications any sustained recovery from the global recession will be a long, drawn-out process.
In New York, the closest gold contract settled $19.50, or 1.6%, higher at $US1219.90 an ounce, which the Nymex confirmed was higher than the previous record high of December 3, 2009.
The most actively traded contract, for June delivery, ended 1.6% higher at $US1220.30 an ounce, just shy of hitting the all-time intraday high, also from December 3, of $US1227.50 an ounce.
Doubts about Europe's economic future returned with a vengeance after the announcement of a nearly $US1 trillion rescue plan.
There's "a growing realisation that the unprecedented measures may not be enough to contain the euro-zone debt crisis," analysts at bullion dealer GoldCore told the Dow Jones news wire.
The measures, meant to shore up financially strapped nations, resemble those the US undertook as the 2008 financial crisis was intensifying. These steps exposed the fragility of the much-anticipated economic recovery.
Investors who over the past several weeks have been on tenterhooks due to concerns about sovereign debt in Greece, Spain and Portugal were further shaken by last week's market rout, much of which remains unexplained.
(One recent explanation is that a hedge fund associated with Black Swan author Nassim Taleb made a huge bet stocks would drop further, triggering a “sell” reaction from computerised trading programs.)
"[Investors] are saying that as long as this climate is here, they're going to put their money into tangible assets," said Mike Daly, gold specialist at PFGBest in Chicago. "And obviously, the N. 1 tangible asset is gold."
Holdings in SPDR Gold Shares, the world's largest gold exchange-traded fund, rose 3.65 tonnes to a record 1192.15, according to ETF (exchange-traded fund) data. Metal is put into storage to back ETF shares that trade like a stock but track the price of a commodity, thus creating actual physical demand.
