Gold has hit a record high, surging over $2,000 dollars an ounce for the first time in history, as increasing numbers of nervous investors seek a safe place to put their money.
Many investors avoid gold because it does not pay dividends or earn interest but its price tends to rise in troubled times because it is seen as a safe haven asset. But like all investments, the value of gold can go down as well as up. The last time we saw a surge in gold prices was during the financial between 2008 and 2011.
The price of gold is rising across all currencies and is €1,700 an ounce, up 28% so far this year.
There is no gold rush in Ireland, according to Mark O'Byrne, Research Director of GoldCore, but demand is strong. "It is people who are more risk averse. They are seeing negative interest rates on deposits, currencies are being devalued, so that's why people are beginning to diversify into gold. We are seeing near record demand again."
Mr O'Byrne said in the short term gold looks overvalued because there has been quite a sharp move up in a short period of time so most people are expecting that correction.
"In the medium term, I think most analysts including Bank of America are talking about $3,000 dollars per ounce," Mr O'Byrne said, "and Central Banks are buying gold because they are concerned about currency devaluations."
