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| Gold hits fresh high |
| 2008-03-05 |
| THE price of gold reached a record high of $US991.47 an ounce in London overnight after the dollar plunged to a record trough against the euro, dealers said. Gold is seen as a safe haven in times of economic uncertainty and is a hedge against inflation. There are now widespread fears that the US economy is lurching into recession and record oil prices of more than $US100 per barrel have raised inflationary pressures. Furthermore, demand for gold has picked up in line with falls in the value of the dollar against other currencies. The US unit struck a new low of $US1.53 against the euro today. US dollar-denominated commodities like gold and oil tend to gain from the weak US currency because a fall in the dollar makes them cheaper for buyers using other currencies |
| Posted by:tipper |
| #2 The gold market defies basic economics. Gold is mined at around $300/oz. The only thing limiting ever increasing production is shortages of people who know how to develop and run gold mines. Something like 90% of all the gold that has ever been mined is still in use or in bank vaults. |
| Posted by: phil_b 2008-03-05 19:39 |
| #1 I've a friend who follows gold closely, and he says it is good odds it will be over $1500 by next November. Besides the typical market forces, both Russia and Dubai are buying up as much as they can. |
| Posted by: Anonymoose 2008-03-05 15:41 |