Gold spiked to a new record high of $1,715.75 per ounce, up a huge $52.00 – or 3% – as markets reacted to S&P stripping the United States of its AAA rating.
The turbulence in global markets led the European Central Bank (ECB) to convene an emergency meeting late yesterday. Up to this point, the ECB has limited its bond purchases to Irish and Portuguese securities. However, late Sunday – in a statement issued in the name of the ECB – the central bank indicated it was prepared to acquire Spanish and Italian debt. With money printing in full swing across the globe, investors are flocking to gold.
Despite numerous bailouts and rescue packages, the sovereign debt crisis in Europe continues to escalate. Bond yields on Italian and Spanish government debt climbed to their highest levels since the euro was adopted in 1999. Investors have fled to gold as a safe haven, driving the euro-denominated gold price to all-time highs.
S&P stock futures spiraled lower, sinking 29.80 to 1168 early Monday morning.