Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Gold surges to a fresh record

The precious metal continues its run on concerns about the dollar and economic jitters. Analysts see $1,200 an ounce before year's end.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Ben Rooney, CNNMoney.com staff writer

G-20 summit: 6 countries in recovery
The G-20's six largest economies took a big hit during the global recession in the past year and a half. Challenges remain but most appear on the path to recovery.

NEW YORK (CNNMoney.com) -- Gold rallied to an all-time high Monday, climbing ever closer to $1,200 an ounce, as the U.S. dollar slid and investors showed nervousness about the economy.

December gold rose $18 to settle at an all-time high of $1,164.80 an ounce, after climbing as high as $1,173.50 earlier in the session.

The rally came as the dollar weakened against its main trading partners, with the euro climbing 0.8% to $1.4973. A softer greenback makes commodities that are priced in dollars cheaper for investors holding other currencies.

"We're seeing significant dollar weakness, and I think that's the main driver today," said Joe Foster, portfolio manager for the Van Eck Global International Investors Gold Fund.

The weak dollar has sent gold surging more than 10% this month as investors flocked to a safe-haven investment. Demand for gold and other so-called tangible assets, which tend to store value better than equity-based investments, often rises in times of economic uncertainty.

Gold is also being supported by a growing expectation in the market that central banks around the world will move to increase their hoards.

India's central bank bought 200 metric tones of gold from the International Monetary Fund earlier this month, and the central bank of Mauritius bought a smaller amount last week.

"We believe the activity of central banks and seasonal weakness in the U.S. dollar in the final four weeks of the year will sustain the strong rally in gold prices," analysts at Deutsche Bank wrote in a recent research report.

Meanwhile, gold is benefiting from a "break-down of confidence" as investors fret about growing fiscal deficits and the ability of governments around the world to oversee the financial system, Foster said.

Given the current momentum in the gold market, and the growing interest from big investment funds, analysts expect prices to continue rising.

"We might have a bit of a pull-back, but the long-term trend is higher," Foster said. Gold will probably top $1,200 some time in December and could climb to $1,300 early next year, he added.  To top of page

They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
A look at Sears through the years Now Sears has officially said its business has an uncertain future, here's a look at photographs that documents the store's rich history. More
Coolest hotel bars for business travelers in 2017 CNNMoney asked a high-end concierge service for routine business travelers what hotel bars they'd recommend in 4 major U.S. cities. Here are the best spots. More
Top credit cards for business travelers 2017 Just like a pair of pants, there's no 'one size fits all' when it comes to the best credit cards for travelers. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play