Speculative demand from investors has pushed the gold market into a “bubble that is poised to burst” after prices surged to a record this year, Wells Fargo & Co said, according to a Bloomberg report.
Gold futures have advanced 26 percent this year, following 10 straight annual gains. The price reached a record $1,817.60 an ounce on Aug 11 on demand for an investment haven as European and US sovereign-debt woes escalated.
Holdings in exchange-traded products backed by gold rose to a record 2,217 tons on Aug 8, Bloomberg data show. CME Group Inc said volume in Comex gold futures and options rose on Aug 9 to a record 504,368 contracts. That topped the previous all- time high of 469,689 contracts on July 28, 2010.
Gold futures for December delivery rose $27, or 1.5 percent, to close at $1,785, the highest settlement ever, on the Comex in New York. Last week, the metal jumped 5.5 percent, the most since February 2009 and the sixth straight gain.