LONDON (Commodity Online): The World Gold Council said on Thursdat that the surge of gold price above $1000 this week reflects the sustained global demand for the yellow metal and the emergence of gold as the safest asset.
WGC said the gold price breaking through the 'symbolic' $1000.00/oz mark reaching $1004.50 shows the great investment potential of the yellow metal.
Before early September, the highest 2009 price was on 20 February when gold fixed (in the afternoon) at $989 and it has traded in the range $870 to $993 ever since, with an average price over that period of $879. The rise translates to an annual increase of more than 21 percent on the average price in September 2008, which was $829.93oz.
Aram Shishmanian, chief executive officer, WGC, commented: "Reaching the $1000 mark once again shows that this price level is no longer the watershed for gold that it once was. The sustained demand we are seeing from investors is, however, not wholly about returns."
The WGC official said that investors are turning to gold as they seek assets which preserve their wealth, whatever the financial weather. 2009 has seen record inflows into exchange traded funds and significant increases in retail demand for bars and coins as investors around the world took steps to diversify risk in a systematic way and improve their portfolios’ long term prospects.
"The stability in the gold price over the long term is testament to the diversity of gold's demand base, which insulates the price from movements in any single category or country. This is a luxury many other assets, more closely linked to industrial output or consumer spending, do not enjoy. This diverse demand base has helped support the price despite a pressure on jewellery demand driven by ongoing economic uncertainty and high local gold prices," Shishmanian added.
