Why are gold prices soaring?

Best Growth Stock – The price of gold has reached nearly $ 1,500 per ounce in the last two days, setting new record

On Monday reached U.S. $ 1497.50, compared to U.S. $ 1476.75 before, and on Tuesday at 12:00 GMT remained high at U.S. $ 1495.78.

The latest increases have been driven by investors’ concerns about public debt in developed countries.

As the financial issues analyst Andrew Walker BBC, “Many international investors see gold as a safe haven when they are worried about the prospects of other assets such as government bonds or debt issued by rich countries.”

“In Europe, increasing speculation that Greece could be declared unable to pay its debts and other countries are struggling to rein in its debt,” Walker said.

There is also concern about the U.S. debt, especially after the risk rating agency Standard & Poor’s investment warned on Monday that they could reduce the credit rating of U.S. government debt.

That does not mean U.S. going to stop paying their debts, but there is growing concern that government bond investors, especially foreigners, to lose money.

This could occur through inflation, a weaker dollar, or a fall in bond prices if they sell a lot more. In this context, the gold seems more appealing to many investors.

Why do prices rise so much gold?

One of the most important investors in the world, Warren Buffet, said that gold has been a very good way to invest in the medium term when there is fear.

“But you really have to expect people will have more fear within a year or two now,” said Buffett, considered the third richest man in the world, after Mexico’s Carlos Slim and Bill Gates also – in a recent interview with the CNBC cable channel.

“If they have more fear, you make money, if they have less fear, you lose because gold itself does not produce anything.”

Although Buffet favors other investments, the price of gold has increased by over 130% in the last five years.

Their demand came in the wake of the global financial crisis of 2008 and in recent months, several factors have supported strengthening, including instability in the Middle East and the situation of the Japanese economy, the third in the world after the recent earthquake, the tsunami and the nuclear crisis.

It is also likely that while questions remain about rising global inflation gold prices remain high.