Gold Price Update- Gold Continues its Record Rise Due to Inflation Concerns

Gold prices continued to register record increases on account of concerns about rising inflation and currency depreciation. Gold future for June delivery rose by 0.5 percent to USD $ 1506.40 an ounce.

The dollar, which was already trading at a 15-month low against the Euro, dropped even further after Standard & Poor revised its credit rating outlook for the US from “stable” to “poor”. The US Treasury Department has projected that the government will reach its USD $ 14.3 trillion debt-ceiling limit by the mid of May, and will run out of options to avoid default by July. In such an environment, it is widely believed that the US government cannot avoid default unless the dollar undergoes debasement, in which case the demand for gold will increase even more.

Gold is expected to increase in value over the coming days, since the current turmoil in the Middle East, concerns about European Sovereign Debt, and the nuclear crisis in Japan are the factors which have increased its attractiveness as a hedge to protect investments, and none of these factors are expected to be resolved quickly.