Gold Reaches Record High In Pounds As Well As Euros

Last night, gold made a record high in Euros: 1,081.43 per ounce. It also made a record high in pounds, although its current record is not much above the previous record.

Gold has had a period of correction and consolidation in sterling (see chart) and indeed in all currencies in recent months. Even with gold at record sterling highs at GBP 942/oz and after the recent gradual gains, gold is only some 14% higher than 12 months ago and only some 3% above the record nominal highs (GBP 914.77/oz ) seen at the end of December 2010 – nearly 5 months ago.

Such gradual gains are hardly indicative of “irrational exuberance”, an investment mania or a speculative bubble.

The gains are also gradual in the Euro. Last night's record wasn't much above the old record set in the midst of the Eurocrisis about a year ago. A lot of gold's gains in greenback terms come from the depreciation of that currency.