COMMODITY MARKETS have seen a considerable spike this afternoon with the prices of gold and silver both rocketing, the former clearing the $1,300 barrier for the first time.
Gold booked for delivery in December hit a mid-day high of $1,301.30 for a single ounce while contracts skirted to $1,299.50.
The increase managed to drag silver to its highest price in 30 years, hitting $21.41/oz.
One commodity trader in London told Bloomberg that “gold traders and investors are looking at silver – they think it’s cheap, and now they’re piling into the silver market. Silver is really about hot money. It may have several more dollars to go.”
Another told AFP that the spike in prices was “fuelled by a combination of things. High investment demand can be seen in inflows into gold [exchange traded funds]; some central banks in Asia are also diversifying their currency reserves further, even at the current high price levels.”
Meanwhile, the dollar – which usually tends to slid when investors plump for precious metals – slid against most of the world’s other major currencies, including the euro which took a boost on the back of new results showing a surprise increase in German consumer confidence.