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article imageGold bullion continues to make record highs, hits $1,308.90 Special

By Andrew Moran     Sep 28, 2010 in Business
Toronto - Amid economic uncertainty, a declining United States dollar and astronomical amounts of debt all around the world, gold and silver bullion have become not just safe havens but also a "safe heaven of investment."
Gold and silver bullion continue to make highs, which has prompted many to question: Is gold and silver in a bubble, or is this just the beginning of the spike in bullion prices?
According to CNBC, gold hit a fresh record high during Tuesday morning’s trading session when it hit $1,308.90USD before contracting slightly to $1,307USD. Meanwhile, silver bullion continues to hit new annual highs on a daily basis. As of Tuesday, silver is valued at $21.56USD per one ounce.
Even though gold has flirted with $1,200 per ounce for over a year, the precious metal has remained stagnant and made little activity; until the last couple few couple of weeks. But why is it making high gains in a quick amount of time?
“The U.S. dollar index hit a fresh eight-month low Monday (September 27, 2010) morning. The dollar index remains weak, technically,” said Moniruz Zaman, President of the Bullion Mart, a Toronto-based precious metals seller. “The inverse price relationship between the U.S. dollar index and gold appears to have strengthened recently. As long as the U.S. dollar index is in an overall price downtrend on the charts, look for gold prices to continue to trend sideways to higher.”
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Over the last 10 years, gold has risen exponentially from $250USD to its all-time high of $1,307USD. The Bullion Mart President says investors shouldn’t worry because there are “still no early technical clues to hint that a market top is close at hand in gold.” He did note, however, that small “pullback” in the near future “would not be surprising.”
In the last five years, silver has also significantly risen. In 2005, silver traded at less than $10USD an ounce and now has jumped to just less than $22USD. Zaman believes silver investors have a long-term technical advantage because there are also no technical clues of a market top or pullback.
“Bulls' next upside price objective is producing a close above solid technical resistance at $22.50 an ounce. First resistance is seen at the overnight high of $21.645 and then at $21.75.”
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