Gold touches its new high of $1,250 per ounce

The recent new high in gold prices stood at $1,250 per ounce on Wednesday this week, since it last touched peak of $1,249.7 in May 2010. Gold prices are continuing to attract investor sentiments, following fear of the Greek economic crisis affecting smaller European countries like Spain, Hungary and Portugal. Media reports also state a reference of Britain’s fiscal deficit being “formidable”, raising investor demand for the yellow metal.

The weakening of the dollar too has affected gold prices. Reports add that the prices in the New York Mercantile Exchange soared for the seventh straight day outstripping $1,225 an ounce .Demand for gold ETFs has increased, while the physical demand has not as much. Also, industry analysts predict the gold price rise could touch $2000 per ounce this year, if the European debt crisis reaches the United States.