GOLD CLIMBS AS INVESTORS SEEK ALTERNATIVE TO CURRENCY

Gold is continuing to rise Wednesday, despite easing concerns of the European debt crisis. As of 11:14 a.m. EST, gold was trading at $1,236 an ounce on the New York Spot Market, silver up at $19.63.

The stock markets continue to recover from last week’s losses despite a wider U.S. trade deficit. Signs of continued U.S. growth and Spain's plans to cut deficit are also helping to push the market higher, Wednesday. As of 11:20 a.m. EST, the Dow Jones industrial average had gained 113 points, or 1%, less than two hours into the session. The S&P 500 index added 12 points, or 1%, and the Nasdaq composite rose 35 points, or 1.5%. U.S. light crude oil moved 16 cents lower to $76.21 a barrel after a larger-than-expected build in crude supplies. The dollar is lower against the euro, but up against the British pound and Japanese yen. (CNN Money, 5/12)

Gold may be heading towards a record high as investors seek an alternative to fiat currencies. “A bubble is forming with sovereign debt,” said Peter Sorrentino, who helps manage $13.8 billion at Huntington Asset Advisors in Cincinnati, adding that gold may soar to $1,800 an ounce within three years. Dennis Gartman of The Gartman Letter wrote Tuesday that the ECB’s purchase of government debt as part of the bailout plan will be at the very least “detrimental to the integrity of the currency itself. That process shall tend on balance to put upward, perhaps relentless, pressure upon gold as gold becomes every day to be seen as the second reservable currency.”(CNBC, 5/11)