SYDNEY, Jan 27, 2008 (AFP) – Turbulence on world stock markets has fuelled a new gold rush, sending high-tech traders in search of the same “barbaric” treasure mankind has lusted after for millennia. It was British economist John Maynard Keynes who called gold a “barbaric relic” early last century, but modern investors are showing the same enthusiasm for the precious metal as the grizzled prospectors of legend.
“We have to put gold into perspective right now with the meltdown in the financial system,” Warwick Grigor, chairman of Far East Capital, told AFP. “There’s great fear out there, and gold stands out as a safe haven.
“When there’s fear of inflation gold is something investors want to purchase because there is a very limited supply — you can’t flood the market with gold.
“Governments can print money — that creates inflation. Paper money is just a promise and that promise gets abused constantly by governments.”
Gold hit an all-time peak of 923.73 dollars an ounce on the London Bullion Market on Friday after a week in which global stock markets plunged on fears of a recession in the United States.
To staunch the bloodbath on the markets, the US Federal Reserve intervened