LONDON (Commodity Online): After the initial surprise and shock generated by the Euro rescue mission worth $1 trillion, the ominous economic woes loomed large over the global markets and as a result the safe haven quotient of gold soared again and the yellow metals again started its upward journey with the prices jumping above $1,200 per ounce levels.
Mostly the gold futures market across the globe witnessed the surge as investors were skeptical about the IMF-EU-sponsored bailout package for the Euro zone.
The sharp rise in inflation in China, the largest producer and the leading consumer of gold after India, also added to the metal's gain. Most of the investors are now treating gold as a hedge against inflation.
An ounce of gold on the Comex division of the New York Stock Exchange gained $17.4 to $1,218.2 an ounce this week. The more than 1% appreciation in the US dollar was also unable to curb the rise in the commodity.
Meanwhile, investment Guru Jim Rogers said European Union is making a terrible mistake by printing more euros. The outlook for the euro remains negative. According to him, the currency, economic uncertainty is pushing gold higher. He said he would much rather own agricultural commodities than go in for gold now. We are not selling gold, but wouldn't buy afresh. Among precious metals, he is betting on silver and palladium.
In another development, global demand for gold bars and bullion coins has surged to the highest level since the collapse of Lehman Brothers in 2008 as investors, particularly from Germany, seek refuge amid volatile financial markets in Europe.
Spot gold in London surged to $1,223.90 a troy ounce, the highest level for the year and just below December's record of $1,226.10.
Traders and coin dealers said consumption was exceptionally strong from German and Swiss investors. The spike appears to have happened because of deep concerns in Germany about the potential inflationary impact of the European Central Bank's decision to buy up eurozone government bonds in the wake of the Greek debt crisis.
UBS, one of the largest bullion banks, said this week its gold sales desks in Geneva and Zurich had experienced the greatest demand for coins and small bars since 2008.
The Austrian Mint has sold 108,000 ounces of Vienna Philharmonic coins in the past two weeks, more than the 89,100 ounces it sold during the first three months of the year.
Holdings in physically backed gold exchange traded funds are at record highs after some ETFs last week experienced their biggest inflows in over a year.
Global investors have been increasingly turning to gold since 2008. Gold traditionally performs well during times of financial distress or in times of US dollar weakness.