Gold topped $1,500 per ounce for the first time ever on Wednesday, hitting $1,505.21; it was bid at $1,505.16 per ounce in morning trading after a Tuesday New York close of $1,493.90. U.S. gold futures for June rose $10.60 per ounce to hit $1,505.70 as worried investors sought safety from numerous worldwide worries.
Reuters reported that the rise in price in April alone was 5%, and that looked set to keep heading upward on talk of Greek debt restructuring and on some fear that Standard & Poor's might downgrade the AAA credit rating of the U.S. Silver followed gold's track upward, coming in at $44.56 per ounce, a 31-year high, and later was bid at $44.51 against $43.89.
While demand in the U.S. and in Europe is based primarily on the quest for a safe haven in the midst of currency woes and uncertainty, there are other factors driving the price of gold elsewhere. India and China, the world's first and second largest consumers of gold, are facing stronger inflation and customer demand for the precious metal. China is also the world's largest gold producer.
Hayden Atkins, an analyst with Macquarie, was quoted in the report saying, "The theme of longer-term higher inflation than we have seen in the last 10 years in China is a pretty solid view, so gold is going to be an asset class that is probably going to be more in favor in China than it has been in the past."
He also pointed out that uncertainty over the potential for growth in the U.S. in particular is contributing to investor unrest. "It looks like [growth] is going to be quite weak in the first quarter, so that may rattle a few people. Then we have a critical policy point coming up with the expected end of (the second round of) quantitative easing." Atkins concluded, "There is enough uncertainty floating around heading into the middle of the year for people to stick with gold."
Those finding the price of gold too heady snapped up silver instead, driving the gold-silver ratio—the number of ounces of silver needed to purchase a single ounce of gold—to its lowest since 1983, at 33.8. Platinum and palladium also moved up, with the former at $1,786.24 an ounce against $1,761.50, and the latter at $753 against $726.95.