Gold hit another all-time high in dollar terms (not adjusted for inflation) today when it broke through the $1,275-per-troy-ounce mark in New York. It is the sixth new record high for gold this year.
We often talk about September being historically the best month of the year for gold as holidays, festivals and other cultural events drive demand for gold jewelry, but the current momentum appears to be a safe-haven move.
As of midday today, bullion is up nearly 2.5% so far this month - which is almost the same amount that it is up today alone. Gold stocks have done even better, with shares rising more than 3% this month so far.
A few datapoints on gold going forward:
- London-based consultancy Gold Fields Mineral Service says it sees gold prices "comfortably" higher than $1,300 per ounce before the end of 2010. Economic and monetary conditions are right for gold, GMFS says - loose money, weak growth prospects and the specter of inflation.
- GMFS also predicts that the world's central banks will be net buyers of gold for the first time since the late 1980s. In fact, only the International Monetary Fund appears to be a seller this year - its latest deal is a sale of 10 metric tons (321,500 ounces) this month to the Central Bank of Bangladesh.
- Jim Wyckoff at Kitco takes a technical view on the price and finds that the current Comex charts show that "longer-term uptrends are firmly in place." He says that the per-ounce price would have to drop under $1,045 before one could say that the current trend may be played out.
And let's not forget silver - it closed above $20 per ounce on Monday and had added a couple of more percentage points by midday today. The current price is the metal's highest since early 2008.
Silver, often called "poor man's gold" when it comes to its stature as an investment vehicle, is up around 20% this year and better than 8 percent so far in September.
Frank Holmes is CEO and chief investment officer of U.S. Global Investors. This first appeared in his Frank Talk blog.