Civilizations have had a close relation to this shiny, malleable commodity for thousands of years. Its value, like diamonds has to do with rarity and to some degree its beauty as an adornment. But it has little "practical" use, say, like soy beans. I'm no economist or even fake economist but I know enough to know that this latest run up in dollar value has to do with the fear of declining dollar value, the reality of declining dollar value, and the decline of the value of real estate as an investment.
When things are bad money gravitates to stability, and then gold as a commodity rises in price because there are more buyers than sellers. Just like a toaster on eBay.
I'm not suggesting you buy, sell or hold. I don't know what will happen, but I do know that a sharply rising gold price is a bad sign. And I am suggesting that broad national monetary policy has an effect on the economy making the elections in 2008 more important. The economy will be a big issue, it seems.
If you are interested in this sort of thing, a friend of mine writes a very comprehensive financial newsletter, emailed to subscribers free once a week. Lots of numbers, stats, and charts. And as you know, guys like charts.
http://www.frontlinethoughts.com/gateway.asp
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