As doubt swirled around Greece and its ability to avoid default, skittish investors returned to the traditional safe haven of gold, driving its price higher after several weeks in the doldrums.
Reuters reported that Tuesday saw the price of spot gold bid at $1,544.10 per troy ounce in midday European trading. Late on Monday in New York, it reached $1,545.90, its highest since June 9. On May 2, it had hit a record high of $1,575.79 per ounce. RBS analyst Nick Moore was quoted in the report saying, "Gold is inextricably linked to the events in Greece; both gold and silver are hostage to contagion fears. The elevation of gold can be firmly nailed on safe-haven buying."
Worries over Greece’s potential failure to enact further austerity measures and fears of contagion throughout the euro zone to Spain, Ireland and Italy—that last nation warned by Moody’s over the weekend about a possible downgrade—have sent investors scrambling for safety.