The breathless reports about record gold prices are everywhere in the financial press, says David Leonhardt in The New York Times. "It's a good story. Unfortunately, it's not true, at least not in any meaningful sense." Yes, economic fears are driving gold prices higher. And, yes, $1,402.80 per ounce, Tuesday's closing price, is technically the highest ever. But the "actual record was set 30 years ago," when the price of an ounce of gold, measured in today's dollars, hit $2,318 — 71 percent higher than it is now. Here, an excerpt:

This isn’t simply a question of math. Anyone who says gold is at a record high (or who said oil was several years ago) is getting the story wrong. Why? Because $10 today is not more valuable than $9 a few decades ago. Claiming otherwise is tantamount to saying that 10 rupees is more valuable than $9 because 10 is a bigger number than 9.

The notion that gold is more expensive than ever happens to fit with a larger narrative that also does not square with the facts — namely, that inflation is an imminent threat...

The recent rise, as Nariman Behravesh of IHS Global Insight notes, has relatively little to do with inflation fears. “It’s not about inflation,” he said. “It’s a hedge against a weak dollar, not a hedge against inflation.”...

If investors really were worried about inflation, gold would probably be a lot more expensive than it is. Who knows? It might even hit a record high.

Read the full article at The New York Times.