Investors flocked towards precious metals, thrusting gold closer to $1,500 and silver to over $40 an ounce today as worries over the devaluation of the US Dollar, possible inflation, and impending government shutdown flooded the news.
Gold notched its biggest weekly gain in four months, drawing support from renewed euro zone sovereign debt fears amid Portugal’s financial crisis and inflation jitters as crude oil and corn hit new highs this week.
Bullion broke above key resistance on technical charts and could target above $US1500 an ounce. The metal has risen more than 10 per cent since late January when political unrest began to flare in the Middle East and North Africa.
“With the expected future inflation being higher in this low interest rate environment, investors are more inclined to have some contributions to commodities as an inflation hedge,” said Hakan Kaya, commodities portfolio manager at Neuberger Berman, which manages about $190 billion client assets.