The Shiny Gold Price

Gold price for December delivery rose U.S. $ 22.8 to U.S. $ 1,644.5 per troy ounce on the New York commodity exchange (NYMEX). Gold price even rose to the highest level at U.S. $ 1,646.8 per troy ounce. While gold prices on Tuesday, August 2 in the spot market rocketed to nearly U.S. $ 30, according to Kitco gold index.

Silver prices also rose 78 cents to $ 40.09 per troy ounce, while the U.S. dollar index against six major currencies rose 0.22 percent to 74.48.

Having the certainty of rising U.S. debt problem. Congress supports the government's proposal to raise the debt limit of a maximum of U.S. $ 2.4 trillion. The current maximum debt of U.S. is now $ 14.3 trillion. Thus, this limit be increased to U.S. $ 16.5 trillion. Investors now see the economic outlook is less bright. Concerns over global economic growth which is running slow is a major factor soaring price of gold.

Poor economic data from the recent economic growth, the manufacturing index up to personal shopping, plus cuts in the budget of U.S. $ 2.5 trillion through the next 10 years clearly makes the U.S. economy difficult to grow. The high threat of U.S. debt downgrades also triggered the fall of share prices on Wall Street overnight more than one percent.

The fall of stock prices make precious metals as a safe haven (a place to park funds that are considered the most secure) to push the gold price surge. Bank of Korea announced the purchase of gold as much as 25 tons in the last two months also contributed trigger a gold price of getting glowing.

Purchases valued at U.S. $ 1.24 trillion, with prices around U.S. $ 1.550 an ounce, marking the country's purchases of gold for the first time since 1998. The central bank is likely to make a purchase of gold when they need to diversify its foreign exchange reserves as well as for long term investment.

The purchase of gold by central banks to make Korea reserves in gold of almost 40 tons, is still too small. Compared gold reserves of the U.S. central bank which reached 78 percent and Portugal's central bank which reached 84 percent, according to the World Gold Council's (WGC)

This purchase making gold prices continued to move up and remind us that other countries will also do the same. Official institutions in the first quarter of this year has made a purchase as much as 129 tons of gold, according to a report request from the WGC.

Since the second quarter of 2009, central banks in developing countries have been buying precious metals. One of the biggest is China. Over the last five years, China's central bank has increased its gold reserves up to 1054 tonnes from the previous only 600 tons. Currently its reserves in gold has just reached 1.6 percent. Can be imagined, if China wants to increase its reserves in gold up to 3 percent, then it takes as much as 1,000 tons of gold!

China is the largest gold producer with production reaching 340 tons of gold per year while India is the largest gold consumer. Purchases of gold that carried China's central bank is to balance the proportion of foreign exchange reserves which have slumped due to the fall of the dollar since the debt crisis and economic slowdown.