“Interesting developments in gold today. It’s been higher all day, but really has gone nuts in the last hour,” Joe Weisenthal reports at Business Insider with this chart of the day:
Pham-Duy Nguyen reports at Bloomberg today:
Gold reached $1,235.20 an ounce amid concern that Europe’s most-indebted nations will struggle to contain deficits after policy makers provided almost $1 trillion in a rescue package. The metal priced in euros and Swiss francs also reached an all- time high today, and bullion in U.K. pounds has surged….
Gold for immediate delivery reached an all-time high of $1,234.50, exceeding the previous record of $1,226.56 set on Dec. 3.
Gold has climbed 11 percent in 2010, following nine straight annual gains. This year, the euro has dropped more than 11 percent against the dollar, an index of equities in major markets is down and returns on the benchmark 10-year U.S. Treasury were up 3.8 percent.
“People are in panic mode,” said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago. “There is absolute panic over the risk of contagion spreading to other countries in Europe. Yields on Treasuries are so low, people are starting to look to gold as an alternative.”
But deficits and endless money printing don’t matter, say the economically illiterate.