What happened
The price of gold hit a new high of $1,059.60 an ounce early Thursday, as investors turned to the precious metal as a hedge against a weakening dollar and the possibility of inflation down the road (CNNMoney.com).
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
That’s not going to stop gold’s rise, said David Goldman in Seeking Alpha. It’s not just inflation: “Gold is a hedge against the collapse of America’s central role in world affairs,” and if central banks get nervous about the dollar, they’ll snap up more gold than miners can produce. “What��s the price of the last ticket on the last train out of Paris on the night the Germans march in?” The sky’s the limit.
Or perhaps big exchange-traded funds have made gold “so incredibly easy to buy and to speculate with,” said Felix Salmon in Reuters, that individual investors have jumped in, in which case “goldbugs are no longer just hold-it-until-you-die inflation hawks and eschatologically inclined survivalists.” If that pans out, gold “isn’t safe”—it’s at the whims of heavily leveraged “speculators.”
