Gold is likely to hit $1,650 an ounce by the end of the year and could even hit $1,700, according to one analyst. "The continuing sovereign debt crisis in Europe, and in the US there is the possibility of further stimulus so all this generates an environment that is positive for gold," Ong Yi Long, investment analyst at Phillip Futures told CNBC. Gold for August delivery rose $7.90, or 0.5 percent, to $1,598 an ounce on the Comex division of the New York Mercantile Exchange in very early morning US trading. Earlier in the day, the contract surged as high as $1,601.20 an ounce, according to data from FactSet. Gold futures finished last week at a record nominal settlement price of $1,590.10 an ounce. Spot gold has had its longest winning streak in four decades, and it hit above $1600.00 an ounce earlier Monday, rising for the second consecutive week as weak confidence in the global economic environment saw investors seek security. Ong told CNBC that silver could benefit from the rally in gold prices despite many investors piling into the metal, only to see prices plummet back in May. "A lot of investors got their fingers burnt when there was the huge fall in silver prices. Investors are understandably cautious and time is needed for them to come back to the market, but with gold prices traded near record highs investors will look towards an alternative and perhaps silver could be the natural choice," Ong added. Traditionally the summer months tend to be a lull for gold as the monsoon season grips India - the largest consumer market for the precious metal - as a halt to weddings and festivals leads to weaker demand. Ong advised any investors keen to hold gold to assess their risk profile before investing. "Which instrument you choose, whether it's an ETF or spot gold, really depends on your risk profile, if you want short term fluctuations in gold prices and to play on that then perhaps spot gold or futures would be best but if you want to be longer-term player, an ETF could be a possible choice," she added. Global stock markets and the euro fell Monday, rocked by debt in the eurozone and the United States, and gold soared above $1,600 for the first time in history as investors sought safety. Europe's banking sector slid as traders expressed doubts over Friday's EU stress tests which gave a clean bill of health to most banks but did not examine the possible impact of a eurozone sovereign default, dealers said. Investor focus is moving towards Thursday's Brussels summit of eurozone leaders who will seek to settle their debt crisis and stop Greece toppling into a possible default and dragging bigger euro economies into deeper trouble. In late morning deals, London's FTSE 100 index of leading companies sank 0.94 percent to 5,788.99 points, Frankfurt's DAX 30 plunged 1.06 percent to 7,143.26 points and in Paris the CAC 40 dived 1.23 percent to 3,680.71. Madrid's stock market slipped 0.28 percent and Milan lost 1.61 percent.
