Gold and The Dollar
Posted on September 24, 2007
Filed Under Currency |
Last week I was hoping to visit Venice and Vicenza for the annual gold and jewellery exhibition but owing to other business commitments was unable to attend. Gold is very much in the news at present as it is trading at over 700 dollars an ounce. Apart from the demand for jewellery gold is generally seen as a hedge against inflation and a refuge in times of market uncertainity and geo political unrest. The metal has surged more than $100 or 17 percent this year.
In addition demand is also being fuelled by individual investors in both India and China where gold has always been considered a sign of true wealth as well as being viewed as a real asset and a safe haven during economic downturns.
The weaker dollar also makes gold cheaper to other currency holders and this too will lift bullion demand. Given that the dollar is unlikely to strength significantly in the short term a watch on the gold price may help to determine any possible turning point.
Fortunately there is another exhibition in Vicenza in January - I only hope gold prices will have stabilised as I really need to buy some jewellery!!
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