Eurozone instability has the price of gold back to flirting with $1,800 an ounce, with the spot price closing at $1,797.60 on Monday.
After more than six weeks below the mark, the metal’s sudden resurgence last week has analysts once again on the lookout for possible momentum toward $2,000 an ounce.
But $2,000 is “a big psychological number,” said James Steel, chief commodities analyst for HSBC. The closest gold’s gotten to breaking through is when it soared to $1,88.70 an ounce Aug. 22.
Since then, the metal’s price flattened as stocks plummeted, reaching $1,592.70 an ounce Sept. 26. Analysts suspected that investors were selling as much as they could to raise cash.
October and the first week of November brought a steady stream of concerns over the debt crisis in Greece and Italy, causing gold to shift back to its classic role as a haven in times of turmoil.
With pressure on Italian Prime Minister Silvio Berlusconi to resign and Greek Prime Minister George Papandreou’s weekend ouster, analysts believe gold will hold above $1,800 for months.
“It’s going to last for some time and be the driving force for the market for the rest of the year,” Steel said. “Gold’s gone back to behaving more normally.”
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-- Tiffany Hsu
Photo: Reuters / Mike Segar
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