Gold Soars to New Record on Darkening Economic Clouds

Gold surged to new record highs Friday, as anxious investors again jumped into the metal as the global economic outlook darkens by the day. Spot gold prices gained more than 2% in early trade today, as investors dumped stocks in Asia and Europe to buy the commodity. Renewed concerns about the strength of growth in the near-term have stifled markets recently. With prices above $1,865, gold is a widely-used gauge of market fear. Ongoing debt problems in Europe and extreme volatility in capital markets have added to the record highs. Investors in SPDR Gold Trust ETF GLD have clearly benefited from the boost. The ETF, which traded below $130 in January, now sits above $175. In addition to gold, government bonds and the Swiss franc have been sought by investors in the so-called safety trade. During times of uncertainty, markets typically rush to assets that are thought to have less risk. Concerns about a new recession or further government-funded bailouts of any organization are again overwhelming already-shaky investors. Especially with the weakness of the recovery after the financial meltdown of 2007-8, asset holders are buying assets with much more diligence.