Falling dollar could push gold to record high
By Javier Blas and Chris Flood
Published: October 30 2007 20:23 | Last updated: October 30 2007 20:23
For a moment this week, it looked as if a sliding dollar and surging oil prices would drive gold through $800 dollars an ounce for the first time since 1980.
Precious metals traders say that a move above this psychologically important level and towards the nominal record high of $850 an ounce reached in January 1980 is likely if an expected cut in interest rates today by the US Federal Reserve leads to further dollar weakness.
But gold is also used as a hedge against inflation and the metal is partly seeing demand boosted by fears that global inflationary pressures are building ï¿½?? a concern that becomes ever more intense as oil approaches $100 a barrel."
With gold > $800, oil near $100, foreclosures skyrocketing, and the S&P 500 price-earnings ratio very high, I think we're screwed. Thoughts, anyone?