The ongoing instability within the markets has pushed the price of gold to record highs in the past few days as investors look for stable investments to put their money. Experts say to not expect these prices to come down any time soon.
By Tristan Navera, Staff Writer
10:59 PM Wednesday, July 27, 2011
Dayton Daily News
Anxiety over the debt ceiling deadline and no solution in Washington have created instability in the markets and pushed the price of gold to a record high Wednesday before falling slightly as consumers look for a stable investment.
Price monitoring website GoldPrice.org said the price of the precious metal surged to $1,627 per ounce at 10 a.m. before closing around $1,612 as the market closed in the afternoon. The price is up 20 percent from 6 months ago and 150 percent from 5 years ago, when the gold was less than $675 per ounce.
The surging price has impacted local jewelers, as fewer people are willing to sell what gold they have left.
“When gold first peaked at $1,000 per ounce in 2008 we saw a huge influx of people selling at that time,” said Robert Williams, owner of Williams Jewelers in Dayton.
Williams said now fewer people are selling gold — most have either sold it already or are holding what they own, hoping to take advantage of the price as it continues to increase.
“Even though gold is at a new all time record high, there’s a finite supply of gold and the public only has so much.” Williams said. “They don’t have anything else to sell, or people are just holding onto it. I know that personally, I’m not selling any of my own gold.”
He also said the number of people buying gold is starting to decline, as the costs continue to climb higher.
Experts say don’t expect those prices to come down any time soon.
Chuck Moul, a professor of economics at Miami University said he worries the price is an indication of low confidence in the dollar. The price of gold has been rising steadily for decades, he said.
Tom Hall, another Miami economics professor, said he worries the price of gold is a bubble waiting to come crashing down.
“People like gold when there’s a lot of political instability ... the US has been printing a lot of money, and people are nervous about inflation.” Hall said. “I think we haven’t seen the end of the price going up.”
Still, he said investing in commodities like gold, silver and oil is a gamble — prices fluctuate rapidly. He noted previous gold surges in the 1970s and 1980s have driven gold prices into the $800 range, then back down to $350 within two or three years.
“Commodity prices can move very quickly, and it’s very risky (to invest in them)” Hall said, “You can lose a bundle when prices come down.”
Contact this reporter at (937) 225-2206 or tnavera@ DaytonDailyNews.com.
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