Thursday, 8th December 2005 (3859 views)

Proving that nothing attracts a crowd like a crowd, the popularity of gold as a currency has shot up since last week, when the precious metal shattered the historic $500 an ounce barrier.

Recent indications from top bullion dealers suggest that suddenly everyone wants in.

Kitco enjoyed one of its busiest days in its history yesterday, according to the Globe, as gold clambered to a 25-year high.

The bullion dealer's phones were ringing off the hook as customers dialled in en masse to buy gold bars or gold certificates stored at an Australian mint.

With the US' public deficit problems sparking high inflation and a lack of trust in the dollar, some commentators are even speculating that gold could become the 'fourth global currency'.

The last time gold breached the $500 marker in 1987 it immediately lost momentum and declined the very next day.

But this time around gold's value has continued to steam up since the yellow metal broke $500 last week, with futures now trading at around $520.

Even with the recent spike in gold prices, some analysts say the precious metal is still well worth a punt.

"From a long-term perspective, I don't think it's too late to enter the game for those who are still on the sidelines," Dale Doelling of Trends in Commodities, told MarketWatch.

 

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