Gold hit a record high, and silver followed

Gold market turned to be incredible last week. The price was increasing to a record high every day. Gold started at the low level 1,727.80 USD last Monday to the highest 1,828.80 on Thursday, which exceeded the historical peak of the previous week. It hit the new record of 1,878 on Friday. There was over 150 USD increase from 1,727.80 to 1, 878. The price finally closed at 1,850.60.

There were many high levels last week. The trend of silver was up, but did not go beyond the record of 50 USD in April. Silver rose at the beginning without obvious increase. Last Monday it started at 36.7. The highest price did not break through 41. But when the gold hit a record high on Thursday and Friday respectively, there were buying orders in the silver market to chase behind. So, silver rose sharply on Friday. The daily price rose from 40.50 to the recent high of 42.90, with nearly 6% increase per day.

Global financial markets last week remained chaotic. Stock market tumbled. Investors worried about whether the global economy goes into recession again so that stock and commodity are subject to selling, and the market capital flows in the gold and silver market. After the U.S. sovereign rating was downgraded by Standard & Poor's, the U.S. debt was still benefiting from the financial market and the uncertain economic situation. Some hedge funds were flowing into the U.S. Treasury bonds. The dollar is thus stabilized. The correlation of the dollar and gold price last week was not obvious.

The performance of gold and silver last week was better than other commodity prices because investors were bearish toward commodity when concerning the economic prospect. In addition, if the U.S. economy goes into recession again, the possibility of launching the third phase of quantitative easing monetary policy will be higher. Under the asset and price bubbles, the gold and silver will be popular again.

Observed from the gold market, new buying orders has supported and affected the gold price. It is estimated the price this week is still at high volatility and has a new record. The volatility can be more than 150. The risk of investment is considerably high. The next high level can be temporarily set at 1,900 with support level at 1,750. Before silver testing a high potential price, the target can be placed at 45 with support level at 39.