Gold price rises over $1,000

Gold prices rose above $1,000 per ounce on Tuesday to its highest since March 2008 — suggesting investors are wary of the U.S. dollar’s weakness and expect international interest rates to remain low for some time.

Gold is typically bought as an alternative to the dollar among safe-haven assets favored by investors seeking to preserve capital. So its rise often correlates to a drop in the value of the American currency.

Some analysts have said the higher gold price reflects uncertainty across markets about how central banks will untangle themselves from global fiscal stimulus aimed at reviving economic growth, as well as dollar weakness.

Along with currencies, analysts were watching stock markets to gauge gold’s direction. A sell-off in equities on concerns about the economy could boost gold’s safe-haven appeal.

Gold Could Hit $1,200

There was scant hint of any spiraling wage concerns in the August nonfarm payrolls report released on Sept. 4, which accompanied news that the U.S. unemployment rate hit a 26-year high of 9.7%. In August, average hourly earnings of production and nonsupervisory workers on private nonfarm payrolls rose by 6¢, or 0.3%, to $18.65. Over the past 12 months, average hourly earnings have climbed 2.6%, while average weekly earnings have risen by only 0.8%, due to declines in the average workweek, according to the Bureau of Labor Statistics.

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