Will the gold market make advances to higher prices?
''Gold futures hit a record above $1,270 Tuesday as investors wanted the perceived safety of the metal after weaker-than-forecast data from Europe's largest economy.
The most-actively traded gold contract, for December delivery, was recently up $24.60, or 2%, at $1,271.70 a troy ounce on the Comex division of the New York Mercantile Exchange.
It hit an intraday high of $1,273, surpassing the record $1,266.50 reached in June as worries about European sovereign debt pushed investors to the perceived safety of the precious metal. Thinly traded
front-month Comex September hit $1,270.40, an all-time high for a nearby contract. Spot gold also hit a new record of $1,271.25.
'It's a striking rally,' said Jim Steel, senior vice president and metals analyst with HSBC in New York. 'If not for the German data, we wouldn't see this reaction.'
The gains in gold come as equities markets are on the decline following a sharp drop in a closely watched survey of expectations for Germany's economy.
The survey, published by the ZEW economic research institute, showed a drop in its economic expectations index to -4.3 in September, its lowest level since February 2009, from 14.0 points in August. Economists had expected a smaller fall to 9.0 points.
Gold often is bought as a refuge and investment-portfolio diversifier because it isn't as linked to economic cycles as more-industrial materials like copper and oil, or equities that form a proxy for the
Just last week, gold posted a record settlement on fresh worries over Europe's banking sector. It then fell back as those concerns eased. Still investors remained reluctant to sell the metal too aggressively as they continued to be concerned about the state of the world's economic recovery.''