After a rough few days, gold futures rose 1 percent to trade at $1,210.55 per troy ounce in New York. Gold prices hit a record high of $1,266.50 per troy ounce in every major currency in mid-June, but fell for the rest of that month, briefly sinking below $1,200.
The specter of a double-dip recession, combined with inflationary fears that have been dogging the markets, combined to help support the yellow metal today. In Europe, a shift to austerity in England, Germany, Greece and Ireland could undercut growth and leave consumer demand and unemployment sluggish.
In the U.S., the states' budgets are in horrid shape and unemployment fell in June for the first time since 2009. A large portion of the drop in unemployment came from the ending of temporary contracts for census workers, a process which will continue for months, weighing on jobless figures.
If the federal government doesn't step in to artificially stimulate demand, the economy may slump - but if it does, it could trigger rapid inflation.
Investors hedge against both possibilites by putting their money in gold, relying on it as a store of value.
