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 all-time high

by Aaron Smith and Hibah Yousuf, staff writers


NEW YORK (CNNMoney.com) -- The price of gold surged to an all-time high for the second straight day Friday as economic anxiety continued to fuel a rally for the precious metal.

Gold for August delivery climbed $9.60, or 0.8%, to settle at a record $1,258.30 an ounce, beating the record closing high of $1,248.20 set the previous day.

The contract also set a record for intraday prices, at $1,263.70. The previous mark was $1,254.50, set June 8.

"I would attribute this latest surge in the price of gold to expectations of political calamity that could lead to considerable economic distress," said John Lonski, chief economist for Moody's. "The jump in the price of gold betrays a lack of confidence in global political and economic leadership. It may not be well-founded, but that's what it's telling me."

Lonski added that this rally is unusual because inflation is well under control. "In the U.S., you have more reason to be concerned about price deflation than inflation," he said.

Many investors view gold as a hedge against inflation because tangible assets such as precious metals tend to hold value better than other types of investments. In addition, gold is often seen as an alternative to paper currencies, which can gain or lose value based on changes in monetary policy.

But inflation remains tame, suggesting that concerns about the outlook for global political and economic events are driving the current rally.

On Thursday, the Labor Department reported that the Consumer Price Index was up 2% for the year, an indication that inflation is under control.

But gold is still far from its real record, as measured in dollars adjusted for inflation. Gold prices hit their true peak on Jan. 21, 1980, with a price of $825.50 an ounce. That translates to an all-time peak of $2,185.75 an ounce in 2010 dollars. To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed4.02%4.09%
15 yr fixed3.19%3.25%
5/1 ARM3.18%3.28%
30 yr refi4.04%4.09%
15 yr refi3.24%3.25%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 20,596.72 -59.86 -0.29%
Nasdaq 5,828.74 11.05 0.19%
S&P 500 2,343.98 -1.98 -0.08%
Treasuries 2.40 -0.02 -0.74%
Data as of 8:26pm ET
Company Price Change % Change
Bank of America Corp... 23.12 0.05 0.22%
Micron Technology In... 28.43 1.96 7.40%
Advanced Micro Devic... 13.70 -0.09 -0.65%
Ford Motor Co 11.62 -0.05 -0.43%
Chesapeake Energy Co... 5.22 0.13 2.55%
Data as of 4:15pm ET

Sections

President Trump says Obamacare is exploding, so it's up to him to make changes to it to keep it afloat for 2018 and beyond. More

In a company-wide email on Friday, Hampton Creek CEO Josh Tetrick wrote that both the SEC and the Department of Justice have closed their inquires into the company's so-called mayo-buyback scheme. More

A PwC report estimates that 38% of U.S. jobs are at a high risk of being replaced by robots and artificial intelligence over the next 15 years. More