After threatening to breach the $1500 per ounce barrier for three sessions, the spot gold price finally surged above $1,500.16 per ounce and then jumped to $1500.70, thanks to the weak showing of the US dollar.

Retail prices for 24-carat gold in the UAE reached Dh180/g for the first time ever, and silver kilo bars surged to Dh5,347.

The S&P’s negative outlook for US debt, with a one in three chances of the ratings agency downgrading US credit in the next couple of months, has made global stock prices crash and investors flock to safe have precious metals.

Spot silver is trading at $44.20 per ounce, a 31-year high and within striking distance of the $50/oz aberration reached in 1980.

The fact that US debt obligations could be put on negative watch is a disquieting, and a large number of global institutional investors who believed the US Treasury to be a frontier in safe haven are now seen turning to precious metals.

“As investors run from currency to currency and find no refuge, they continue to come back to gold and silver, making new records,” said John Kilduff, a Partner at Again Capital in the US. “Whether it’s political instability, the hyper-easy money power of QE1 and QE2, whether it’s inflation that’s staring to creep into the [global] system… the sum of all those theories is being incorporated into the price of gold and silver,” he added.

Does it get any better than this for the precious metals?

“Think what you like, I say it will at least pierce that barrier and reach $1,525 before this rally ends, and $1,600 is not out of the question,” says gold buff Franklin Sanders in his blog on glodprice.org.

“At the risk of being indicted for stating the obvious, a market hasn’t turned until it has turned. Neither silver nor gold have blinked yet, much less signalled any turnaround concretely. A trend in force remains in force until violated, and nobody is writing any tickets to silver or gold yet,” he quips.

“Because there is no place else for people to feel safe about putting their money, these are the only stores of value in the market,” added Kilduff.

Silver, which has seen its price escalate much more than gold in the past one year, up about 147 per cent in 12 months, is called the poor man’s gold and is benefiting from a slew of ETF launched in the past couple of years, which have made silver more accessible as an investment option to the common man.

Besides, the industrial demand from China and India, along with a number of other emerging economies, is pushing the silver prices more than it is pushing gold since silver is used more extensively for industrial purposes than gold.