Consumers can expect to pay more for gold jewelry in the coming months, with the price of the precious metal on track to break US$2,000 per ounce, experts say.Gold closed up $10.70 to US$1,612.20 an ounce Monday after earlier soaring as high as US$1,624.30. Several experts say gold bullion could reach the milestone of US$2,000 per ounce as early as next year.
"It means higher prices for any kind of a jewellery product," said John Kurgan, senior market strategist at Lind-Waldock, a commodities specialist firm.
The value of gold is often seen as a barometer for confidence in the world economy, and has long been a favourite of investors seeking to minimize risk. As investors grow jittery, they buy gold, which is seen as more secure than cash or other investments. That drives up the price of the precious metal, which has nearly doubled in the past three years, from $880 per ounce back in early 2009.
Credit rater Moody's downgraded Greece's bond ratings by a further three notches Monday, and warned it is almost inevitable that country will be considered to be in default following last week's new bailout package.
And with United States politicians struggling to raise the country's debt ceiling by the Aug. 2 deadline, investors are flocking to the security of gold.
"There's becoming a lack of confidence in those two major currencies, the U.S. (dollar) and euro currency," said Kurgan.
"People have been using gold as a store of value, and they've been diversifying out of some of those currencies into gold just as a safe haven of sorts and that's really what's been pressing (the price of gold) of late."