Gold futures on Tuesday rose to a record in New York as government debt in Europe spurred demand for the precious metal as an alternative to currencies.
Gold futures reached $1,232.50 an ounce amid concern that Europe's most indebted nations will struggle to contain deficits after policymakers provided almost $1 trillion in a rescue package. The metal priced in euros also reached an all-time high on Tuesday, and bullion in U.K. pounds and Swiss francs has surged.
“This is the beginning of the unraveling of fiat currencies,” said Michael Pento, the chief economist at Delta Global Advisors. “Money has to be backed by something. People are beginning to realize that gold is the world's reserve currency.”
Gold for June delivery jumped $19.50 to settle at $1,220.30 an ounce. Earlier in trading, gold rose as high as $30.90, to $1,231.70. The previous record was $1,227.50 on Dec. 3. Gold for immediate delivery reached an all-time high of $1,231.70, exceeding the previous record of $1,226.56 set on Dec. 3.
Gold has climbed 11% in 2010, following nine straight annual gains.
