Gold Hits Record $1K per Ounce

Slumping US economy, dollar sends investors to shiny commodity
By Kevin Spak,  Newser Staff
Posted Mar 13, 2008 1:03 PM CDT
An Afghan man speaks on a phone as he walk past a gold shop at a shopping complex in Kabul, Afghanistan, Thursday, March 13, 2008.   (AP Photo/Rafiq Maqbool)
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(Newser) – Gold hit $1,000 per ounce for the first time today, the BBC reports, as investors flock to commodities. The precious metal is already up 20% on the year. “Every bit of bad US economic data boosts gold in two ways,” said Fortis Bank, both because gold is a “safe haven” asset and because the dollar drops on expectations of US interest-rate cuts.

The US dollar is falling precipitously—at one point today it fell below 100 yen, and hit a new low against the euro at $1.56. The situation will probably worsen, too, if the Federal Reserve again reduces rates as expected. That, combined with an uncertain stock market, makes commodities like gold and oil look especially appealing.