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Normally, the Financial Times sucks, but this article almost sums it up why gold is not “the ultimative investment”.
“Gold has been a great investment recently, but psychology rather than supply and demand are responsible.”
And whenever psychology causes big price increases, run as fast as you can!
Further, I would add that gold supply is stagnating because of political failure. South Africa’s shrewd economic policy certainly took its toll on gold production. China, world’s greatest gold supplier, may well be able to dig out more, if they like to. Now, they are certainly enjoying high gold prices as a hedge against a falling dollar.