Discussing the recent rise in gold prices to record highs amidst the european debt crisis and corresponding stock market volatility. Turmoil in Europe has weakened the euro as a successive series of promised bailouts to heavily indebted Greece have merely given the problem time to worsen and threaten to spread to other financially troubled euro-zone countries, such as Portugal and Spain, as borrowing costs continue to rise. The latest 'shock and awe' bailout package agreed to by the European Union and IMF this weekend has also failed to quell market fears. The ECB is now faced with monetizing debt much like the Fed has, in effect printing money, contrary to the bailout restrictions of the Maastricht treaty. The U.S. faces a similar crisis down the road as its own sovereign debt is increasing drastically. The impending debasement of fiat currencies to handle these debt loads has featured strongly in the rising demand for gold as a store of value. The massive money supply also factors into stock market volatility (Figure 1), thus weighing on investor sentiment and prompting further safe-haven flows into gold. Gold has hit new highs against not only the U.S. dollar (Figure 2) but the euro, swiss franc, and pound as investors worldwide seek to preserve their wealth. The relatively tight availability of actual metal on the market is strained by an increasing demand for it, with escalating prices as the result. Featuring Pete Grant, Jonathan Kosares and George Cooper.

Figure 1

Figure 2

Sign Up for our FREE NewsGroup to receive timely email notification of our periodic gold news alerts, USAGOLD Market Updates, and future Video RoundTables like this one! The ABCs of Gold Investing click here to learn more about the book, or to order for only $5.95 (plus $4 shipping).