Gold price sees best week in 6 months
(Kitco News) Gold rose more than $70 this week after finally cracking the psychologically important $1,800 an ounce level. Gold hit a 10-week high on much weaker-than-expected U.S. employment data, a lower U.S. dollar, and a retreat in U.S. Treasury yields. Here's a look at Kitco's top three stories.
3. After hitting the $1,800 level, analysts were busy speculating what's next for gold. Many say there is momentum for higher prices, with growing inflation fears triggering risk-off trade into gold.
"With all the stimulus that is expected to come through, I can see why this narrative of more debt and higher inflation will continue to drive gold prices higher," said Robin Bhar, an independent market analyst.
2. Bank of America said that the metal's unprecedented run to 10-year highs of above $10,000 per tonne is just the start of a much larger move higher.
The bank is not ruling out copper hitting $20,000 a tonne as the market deals with significant supply crunch and growing demand. "If our expectation of increased supply in secondary material is wrong, inventories could deplete within the next three years, giving rise to even more violent price swings that could take the red metal above $20,000 per tonne," Bank of America said.
1. Legendary investor Sam Zell bought gold after spending his career asking: 'why would you want to own the metal?'
The 79-year-old American billionaire said he was pushed into buying gold due to concerns about fiat currency. "It has no income. It has costs to store, and yet when you see the debasement of the currency, you say, 'what am I going to hold onto?'" Zell told Bloomberg.
The U.S. is not the only country that is printing too much money. And one of the natural reactions is to buy gold, he added.