This week the gold price burst through its all-time high of $1,032 reached in March last year to hit a new record high of $1,043. The question now is can gold make new highs? To answer this we have to first understand what's been driving the gold price upwards and whether these factors are sustainable.
Supply/demand imbalance
Dan Fisher, founder of gold bullion dealer Physical Gold, points out there is a supply demand imbalance in the market which remains supportive of the yellow metal. On the supply side there was only one new major gold recovery in excess of 2m ounces in 2007 and none last year at all. This compares with more than 15 major finds a decade ago. Mr Fisher notes that the lack of new supply is exacerbated by the diminishing secondary supply due to more central banks hoarding and building up their gold reserves.