GOLD rose beyond $850/oz in London yesterday, breaching a record set more than 25 years ago as investors sought to hedge against accelerating inflation and the dollar’s decline.
Gold for immediate delivery gained $25,50, or 3,1%, to $859,20/oz in London late yesterday afternoon, exceeding the previous record of $850 on January 21 1980. The metal has climbed from a 20-year low of $251,95 in August 1999.
Prices advanced 31% last year, the biggest gain since 1979, when US inflation was more than 13%. The metal is being buoyed by many of the same factors that drove the gains in January 1980. The dollar was weakening, costlier oil signalled inflation, and the US and Iran were at loggerheads.
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NVDL: The difference between now and 1979/1980 is that there is no more North Sea field to discover, no more Prudhoe Bay (in Alaska), no more Russian oil fields that have escaped our efforts at discoery. Even worse, we have more people, and more cars and homes (suburbia essentially) using limited energy resources. Something has got to give and while human beings are not in the habit of giving up their bad habits, they will be forced to do so, and worse.
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