Gold prices hit yet another record high Monday as rising concern over the increasingly wobbly financial system led investors to seek safe-haven assets.
Benchmark bullion contracts were rallying $12.30 at $910 an ounce in recent action on the Comex division of the New York Mercantile Exchange. Spot prices for the metal started the year at around $840 before roaring past the prior all-time high of $875 reached in 1980 amid the Iran-hostage crisis. The $900 mark was breached on Friday for the first time but only for a moment.
The bullion exchange-traded funds, which hold inventories of gold bars, were racing ahead also, with
streetTracks Gold Shares
iShares Comex Gold Trust
both up about 1.3%.
"People are sensing the instability, and the instability is causing people to want to buy hard assets," says Peter Spina, chief investment analyst at
, in Denver. "The primary reason is that lack of confidence in the financial system."
Spina says the increasing uncertainty throughout the world about the quality of paper assets is also making the euro unpopular, as well as the greenback. Instead, he says, investors are buying gold as a long-term store of value.
In the precious metals patch, BMO Capital Markets upped its rating on
(GOLD - Get Report)
to market perform from underperform and raised its stock price target to $48.
Shares of Randgold were rallying more than 3% to around $45.
(AUY - Get Report)
was ahead by 6% following the firm's pleasing output projections for the next two years.
Golden Star Resources
(GSS - Get Report)
was up 4%, buoyed by the rising price of gold.