The price of gold continues to smash records and dash hopes for an economic recovery.
Gold futures hit a record close of $1,248.70 an ounce in New York Thursday, up $18.20 or 1.5 per cent, in response to weak economic data out of the United States and amid growing concerns about Europe's debt crisis.
The price of gold rose as much as $1,252,80 during the day, which is shy of its intraday record of $1,254.50 reached on June. 8.
Gold is on a tear as investors continue to fret about the fragile global economy, including a slower-than-expected U.S recovery and possible defaults of government debt in some European countries.
"Gold has the weight of the world on its shoulders," said Frank McGhee, the head dealer at Integrated Brokerage Services in Chicago.
Investors are increasingly turning to gold as a safe haven investment, and away from currencies such as the Euro and U.S. dollar.
That was particularly true on Thursday, when a string of downbeat news was released about the U.S. economy, which helped drive gold to its record finish.
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A report showed manufacturing in the key Philadelphia region expanded in June at a slower rate than forecast, while the number of people seeking unemployment benefits rose unexpectedly last week.
The weak data has put a damper on what many economists expected would be a steady recovery this year from the recent global recession.
That it hasn't happened is making investors nervous, and turning their attention to gold.
"Every time there is a concern there is less of a risk appetite, and gold tends to benefit," said Bart Melek, a global commodity strategist with BMO Nesbitt Burns Inc.
And, as gold moves higher, expectations of a global economy recovery fade.
That includes everything from Europe's mounting debt troubles, figures showing the U.S. economy slowing and its rising real estate foreclosure rates and even worries about a cooling of China's economy - even though its growth is still considered strong.
"When you put the whole picture together, you realize we aren't in an economic recovery," said Nick Barisheff, chief executive of Bullion Management Group.
Gold is expected to continue to climb this year, with most predictions ranging from about $1,300 to as high as $2,000.
The metal is expected to keep moving up as a result of more bad economic and further announcements related to government debt troubles, mostly from Europe.
Gold's rise will also likely be driven less by a hedge against inflation, but investors "calling into question the integrity of paper currencies," said Patricia Mohr, vice-president of industry and commodity research at Bank of Nova Scotia.
With files from Bloomberg NewsReport Typo/Error