Gold price sets record
Metal has 7th week of gains
Gold prices soared to new highs Friday, gaining as much as $59.40 US, or 3.3 per cent, to $1,881.40 US an ounce.
Bullion for December delivery later gave up a large part of that, but still closed up $30.20 on the New York Mercantile Exchange at $1,852.20.
The metal was headed for its seventh consecutive week of gains, the longest string of advances in almost four and half years.
Investors have been pouring into gold, looking for a place to conserve wealth amid concerns about the possibility of a U.S. downturn, Europe's debt crisis or inflation after extensive government stimulus spending.
South Korea's central bank purchased gold for the first time since the Asian financial crisis more than a decade ago as it seeks to diversify the country's increasing pot of foreign reserve holdings.
The gold portion of South Korea's official foreign reserves surged to $1.32 billion at the end of July from $80 million at the end of June, the Bank of Korea said earlier this month.
Prices rise for 11 straight years
Morgan Stanley on Thursday joined other analysts and cut its global economic growth forecast for this year and next, saying that the U.S. and the 17 countries that use the euro were "hovering dangerously close to a recession."
In October 2007, gold sold for about $740 an ounce. A little over a year later, it rose above $1,000 for the first time.
This past March, it began rocketing up. It's up more than 25 per cent since July 1, and has risen by seven per cent this week alone. The price has steadily risen for 11 straight years.
The shares of gold mining companies have not followed the metal's price up by anything nearly as much. In six months, the Toronto Stock Exchange's S&P/TSX Global Gold Index has gained only three per cent.
Some investors warn gold prices are a bubble ready to burst.
Cetin Ciner, a professor of finance at the University of North Carolina-Wilmington, said gold is near a peak and people who buy now are blindly chasing the rising price.
"I'm thinking of it as like the dot-com stocks," Ciner said.
(With files from The Associated Press)