“Precious metals soared on Wednesday, supported by a tumbling dollar and record oil prices, with gold nearing its all-time peak, platinum setting a record and silver touching its highest level in 27 years.”
“Meanwhile, risk aversion in the equity markets, as fears the US subprime problems will slow growth, sparked a rush towards safer assets such as gold.
'As long as the financial markets remain fragile and investors risk averse, gold prices will be a beneficiary,' said HSBC analyst James Steel.”
From The Chicago Tribune:
“Gold is a classic investment for those who want to protect their wealth, and gold enthusiasts say there is more incentive to do so now because the declining value of the dollar erodes buying power…”
“…'The falling dollar is the very definition of inflation,' said Chip Hanlon, president of Delta Global Advisors Inc. in Huntington Beach, Calif. 'A weak dollar makes the cost of living for all of us go higher and gold is the best hedge against that.'"
“There still seems to be no end in sight for the rally that has propelled the cost for one ounce of gold up more than 30% since the beginning of the year, with most of the action coming since the subprime problem got ugly this summer.”