(San Francisco, CA) Gold futures surged $9 an ounce in mid-day trading, reaching their highest levels since 1980. Analysts pointed to high crude prices and a jump in consumer prices as triggers for the continued rise in the price of gold.
"The volatile mixture of oil, gold, and world economics and politics continues to show signs of disquieting instability," said Jon Nadler of Kitco.com. "The three components of this maelstrom appear to feed off of each other, as news propels oil, and then oil propels gold."
Gold is a traditional hedge against inflation, and is also the preferred investment strategy of those who fear political instability. I invested rather heavily in gold in the late 1990s, especially as I thought Y2K might cause some serious disruptions to the economy.
Had I held on to my Eagles, I might have been able to cash in on this run. Alas, I dumped them at a very small profit in 2000-2001.
This has been the story of my investment life; if I ever sound as though I am knowledgeable and push an investment strategy, do the exact opposite of me and you should turn a handsome profit.
These days I diversify in managed funds, close my eyes, and congratulate myself for avoiding the temptation of day-trading and speculation in volatile markets like precious metals and currencies.
Addendum, 3:20 pm: Undoubtedly influenced by the fact that historymike is not buying gold, wise investors have jumped in and driven the prie of gold above $640 per ounce later this afternoon.