World Economic News

Gold Price Rises Sharply as World Economy Teeters

Gold prices shot up on Dec. 9, reaching $530.40 per ounce—the highest since 1981. The price of gold has gained about 20% in 2005, and has doubled in about five years.

The gold fever is being triggered by Asian countries, led by China and India. One of the reasons cited, is increasing worry in these countries about the weakening of the major currencies, including the euro, dollar, and yen. Another reason cited by some analysts, is that the hike in crude prices has begun to feed into inflation.

In November, Russia, Argentina, and South Africa bought quite a bit of gold in order to increase their holdings, when the European central banks sold more than 100 tons of gold.