Gold set a record price for the second day in a row Wednesday, as investors reacted to concerns over the euro zone debt crisis. Adding to the pressure on the precious metal’s price was the news that several nations’ central banks had also bought gold.
Reuters reported that growing worries over the fragility of the Italian and Spanish economies, coupled with fears that the U.S. might default, had driven the metal higher in recent weeks. The trend continued despite the debt deal in the U.S. as Italy took center stage for its own debt woes. Investors also have lingering concerns over how ratings agencies might handle the triple-A rating of U.S. debt.
In European trading, spot gold had been quoted at $1,667.49 per ounce, which was up 0.4% for the day so far. It had hit a record $1,672.65 earlier. U.S. gold futures also saw an increase increase of 1.4%, coming in at $1,665.50 per ounce.
News from the International Monetary Fund (IMF) that a number of central banks, including those of Russia, South Korea, Thailand and Kazakhstan, had also bought gold in June showed that governments were solidifying reserves in bullion instead of in currencies.