Spot gold has been trading comfortably above the $1,730/oz mark all day, even in the face of the surging dollar. Silver is enjoying similar popularity. The dollar’s surge is not surprising, with the raft of good economic indicators from the past week. With the Japanese yen also showing strength despite the failure of their recent round of quantitative easing, though, we get a clue behind what’s happening: people are fleeing the meltdown in Europe as even Germany is getting pulled into the economic morass.
People are fleeing to the dollar as a safe haven. The fact that gold is rising even in the face of a stronger dollar indicates that some people prefer something other than fiat currency as a safe haven, or are looking longer term than a temporary haven that they will jump right back out of. As always, we can’t give investment advice, only remark upon the market factors as we see them. You should consult with a financial planner when making your investment decisions.