Gold hit its all-time high $1,594 an ounce, taking silver up to $39 an ounce. While some economists in the United States doubt that the gold price is going to continue to climb and that the gold bubble is going to burst any time soon, economic news channels around the world are considering gold to hit $5000 an ounce as a possibility. Peter Hambro, chairman of Britain’s biggest pure gold listing Petropavlovsk says the possibility of a QE3 will eventually drive gold up to $5000 an ounce, “It is very scary: the flight to gold is accelerating at a faster and faster speed.”
“One of the big US banks texted me today to say that if QE3 actually happens, we could see gold at $5,000 and silver at $1,000. I feel terribly sorry for anybody on fixed incomes tied to a fiat currency because they are not going to be able to buy things with that paper money,” he adds.
A lot of countries have limited their exposure to the US dollar and have diversified their reserves into euros over the last decade. However, currently the European monetary union is facing a crisis itself and therefore there is no other safe-haven currency, not even the Swiss franc, Canada, Australian dollars and the Korean won. The countries that have been diversifying their reserves are China, Russia, Brazil, India and the Mid-East petro-powers. Besides holding the euros, they have also been buying gold, while the west have sold most of their gold at the depth of the bear market about a decade ago.
Telegraph.co.uk writes,
Step by step, the world is edging towards a revived Gold Standard as it becomes clearer that Japan and the West have reached debt saturation.” World Bank chief Robert Zoellick said it was time to “consider employing gold as an international reference point.” The Swiss parliament is to hold hearings on a parallel “Gold Franc”. Utah has recognised gold as legal tender for tax payments.myloansconsolidated.com
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