New precious metal boom or large correction?

Gold advanced further for third week in a row, but the increase is minor when compared with the gains made in the previous two weeks.

However, the yellow metal did record a fresh all – time high at $1609.80 despite mostly ranging sideways for the week. Again in the spotlight this week has been the European sovereign debt crisis. European officials were discussing the situation with Greece and, towards the end of the week, ironed out a plan to release E159bln in new aid and also enabled their E440bln rescue fund to purchase debt across stressed euro nations following the panic selling in the week prior. Fitch ratings commented on the plan, saying Greece faces a “restricted default”.

However, gold rose again as fresh concerns mounted that the crisis has yet to be concluded. Many investors are not fully convinced by the positive developments.”

Market analysts always have differing views. Some herald the beginning of a new precious metal boom, while others cite the start of a large correction.

However, keep your eye on the credit rating of the US as both Moody‘s and S&P threatening to downgrade US debt from the AAA rating it‘s held since 1917.