Gold Rallies to New Record High as Citigroup Raises Price Outlook

The price of gold hit a new record high Monday, as investors around the world again scrambled for cover amid renewed recession fears and Citigroup's C raised near-term price outlook on the metal. Spot gold prices broke above the $1,881 mark in early trade today. The commodity has been a become a poster child for safety-oriented investment, especially as global equity markets experienced significant volatility recently. A report put out by Citigroup cited a multitude of factors that contributed toward its price outlook increase on gold. "Increased global risk, U.S. dollar weakness, growing inflationary fears, the U.S. debt downgrade and continuing sovereign debt risks in Europe have increased investor appetite for gold, triggering recent price strength," Citigroup said in the note. The bank now projects gold prices of $1,650 per ounce for 2012 versus $1,325 previously, and $1,500 per ounce for 2013 versus $1,225 previously. The SPDR Gold Trust ETF GLD has seen significant new investment this year, as investors of all types poured into the gold-holding fund. Trading below $130 in January, the ETF now sits just below $180. Ongoing sovereign debt problems in Europe and increased uncertainty over already-meager growth rates has sent the commodity to new records on an almost weekly basis.