August 23, 2011 - 6:41AM
Gold extended a rally to a record, topping $US1900 an ounce in New York for the first time, as mounting concern that the global economy is faltering spurred demand for bullion as a protection of wealth.
Goldman Sachs Group Inc. lowered its forecast for US growth in 2011 on signs that the recovery in the world's largest economy lost momentum. German Chancellor Angela Merkel attempted to shut the door on common euro-area bonds as a means to solve the debt crisis, saying she won't let financial markets dictate policy.
Gold is in the 11th year of a bull market, the longest winning streak since at least 1920 in London. Prices have more than doubled since the end of 2008 as governments across the world struggled with debt crises and as record low US borrowing costs boosted the appeal of bullion as a hedge against inflation.
"People are losing confidence in monetary management," Nick Barisheff, who helps manage $US650 million as the president of Toronto-based Bullion Management Group Inc., said in a telephone interview. "Gold has been a form of currency for the last 3,000 years and will continue to be so."
Gold futures for December delivery gained $US44.80, or 2.4 per cent, to $US1,897 an ounce at 4:13 p.m. in after-hours electronic trading on the Comex in New York. Earlier, the price touched a record $US1,900.80.