Gold closes near all-time high

By Blake Ellis, staff reporter


NEW YORK (CNNMoney.com) -- Gold neared its all-time high on Friday amid ongoing concerns about contagion in the euro zone and as stocks slumped.

What prices are doing: Gold for June delivery rose $13.10 to settle at $1,210.40 an ounce, its highest level in five months.

Gold's all-time high is $1,226.1, which it reached in December, 2009.

On Thursday gold rallied as the Dow plunged nearly 1,000 points and investors worried that Greece's debt issues may spread to other euro zone nations.

What's moving the market: Investors continued to seek out safer investments on Friday, still feeling uneasy after the massive sell-off in U.S. stocks during the previous session.

And as the stock market slid for a second day Friday, gold again reaped the benefits.

"The market's instability shows that fear has started to come back to the market, and that's definitely something that benefits the gold market," said Peter Spina, president of Gold Seek LLC.

Persistent worries about contagion in the euro zone also boosted the appeal of gold. After a bailout package was created for Greece last week, investors fear that other debt-laden euro zone members may need financial assistance as well.

"There are a lot more Greeces out there," Spina said. "You're looking at Spain, Portugal and others down the road that are all potential problems -- there are just a lot of questions out there and I think that will help drive more money into gold."

And as the euro weakens, investors are worried that there is no other safe place to put their money, said Spina.

"The dollar has had its issues recently and the alternative has always been the euro," he said. "But now that the euro has been having its own problems, where do you put your money?"

Outlook: Spina said that while gold may pull back slightly from its recent run-up, prices will remain strong as investors continue to worry about debt issues in Greece and the euro zone.

"I wouldn't be surprised if this [run-up] pulls back and consolidates, but we may get to a point in the next month or couple of weeks when gold will make another stab at these record highs," he said.

Spina said gold prices could even hit $1,300 this summer, which would be a new record high. To top of page

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