Could the rising price of gold could just be a golden opportunity for less expensive metals? Gold prices climbed again today to $1,277.80 an ounce, hitting its highest price ever for the third time this week as investors stepped up demand for a haven from what some see as economic turmoil.
Furthermore, analysts speculate it could hit $1,300 by year’s end. Gold has always been considered a safe hedge in uncertain economic times, and the labor market certainly has a way to go, despite mild recoveries.
Before today, gold gained 16% this year, outperforming stocks, bonds and many commodities as sovereign-debt concerns and an uneven economic recovery roil financial markets. Silver was little changed after approaching the highest price since 1980, just under $21 an ounce.
“Gold is accelerating,” said Adam Klopfenstein, a senior market strategist at Lind-Waldock in Chicago. “We’re getting to a point where the public is getting spooked by the instability in financial markets. Gold is going to be the asset of choice when investors are seeking safe havens.”
In addition to the financial repercussions of gold’s all-time high prices, sales karat gold jewelry sales may face a further drop, too. The category already has been hard hit by consumer’s tightening their budgets on discretionary spending and turning toward alternatives such as sterling silver, vermeil and gold-plate jewelry.
Congressional Committee Investigation Called
Meanwhile, The House Subcommittee on Commerce, Trade, and Consumer Protection will meet on September 23 ” to discuss legislation that would regulate gold-selling companies, an industry who’s relentless advertising is now staple of cable television,” according to a statement.
Reps. Anthony Weiner (D-NY) and Henry Waxman (D-CA) have announced a hearing as a result of Goldline International, a company that encourages consumers to convert their assets into gold to prepare for the supposedly inevitable market collapse. Goldline has been accused, by Weiner and others, of using “aggressive sales tactics” and “selling overpriced gold coins.”