Friday, March 14, 2008

Why $1,000 an ounce isn’t the peak for gold

Source: Money Week

"It was a bit of record-breaking day yesterday.

Gold touched $1,000 an ounce, a nominal (excluding inflation, in other words) record. Crude oil hit $111 a barrel, a record even if you do adjust for inflation.

Why the ongoing surge in key commodity prices? Well, it’s down to the dollar, which also broke a series of records, though on the way down, rather than the way up.

The US currency hit a record low of more than $1.56 against the euro; it also nearly hit $1 to a Swiss franc (a classic safe haven currency) for the first time in history, according to The Telegraph. Meanwhile, it fell below 100 yen for the first time in 12 years.

So why the collapse – and what’s next? ..."

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