Gold AT 1317$

Gold continued its seemingly inexorable advance this week, reaching a new nominal record high of $1313.45 an ounce on Wednesday. Gold is heading for a tenth consecutive year of annual gains, the longest winning run since 1910. Bullion dealers Kitco International commented that 'most of what we have witnessed in the complex during the month has been clearly based on perceptions of an inevitable second chapter in Fed accommodation'. [1] Speculation surrounding possible additional stimulus measures in the US has increased following a barrage of weak economic data from the world's largest economy. Tuesday's readings of consumer confidence and manufacturing indices point to a stagnating US economic recovery, and the inflationary possibilities raised by a return to quantitative easing (QE) have driven investors towards the safe haven of gold. A poll of bankers, gold miners and analysts meeting at this year's London Bullion Market Association conference forecast that gold would reach $1450 an ounce during 2011, a 10.5% increase from current levels. The bullish mood surrounding gold has also been stoked up by news that central banks, led primarily by Russia and Asian governments, will become net buyers of the precious metal after two decades of net selling. Credit Suisse observed that 'it's quite possible that if there are any further upsets in either the currency markets or the rates markets ... we could get another leg higher and then we'd be looking at the next upside target at $1330'. [2] Holdings in the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, climbed by five tonnes on Tuesday, while buying in India rose on Wednesday as the strength of the rupee helped to shield local buyers in the world's largest democracy.