Gold Replacing Dollar as World’s Reserve Currency?

With food and oil prices on the rise, central banks usually look to the U.S. dollar to secure the value of their savings. However, according to reports, banks are looking to gold.

From CNBC.com:

What are they buying instead?

The yellow metal hit a fresh record high this morning, while the dollar index dropped to a 15-month low. The news had Fast Money’s Brian Kelly looking to add more gold and silver longs to his portfolio Thursday morning.

“What is working is gold, silver and oil,” said Kanundrum Capital’s Kelly. “I wish I had more.”

Gold and silver have become the inflation hedges of choice for some investors. Gold hit an intra day high today of $1,448 per ounce. Silver is trading at 31-year highs, hitting an intra day high of $38 per ounce.

More at CNBC.com...

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Gold Prices Hit New Record

From CNN Money.com:

Gold prices climbed to a new record Tuesday as Europe's debt troubles sparked demand for perceived safe havens, such as the precious metal, and investors hedged against inflation.

What prices are doing: Gold for August delivery rose $3.60 to $1,244.40 an ounce. It climbed as high as $1,254.50 an ounce earlier in the day, a record for intraday trading.

What's moving the market: Investors remained wary about the global economic recovery amid Europe's ongoing sovereign debt problems and looked to gold and other low-risk investments, which are attractive during times of economic crisis and uncertainty.

The metal's price has jumped 13% this year.

Gold prices also got a boost from investors who believe Europe's fiscal problems will subside and are instead worried about rising prices. The Federal Reserve's loose monetary policy has some traders worried about inflation.

What analysts are saying: "One one hand you have the possibility of additional problems in Europe going forward. And if Europe implodes, gold prices will continue to rise sharply higher," said Tom Pawlicki, precious metals analyst at MF Global.

"But if the European problems go away, gold will still trade higher based on the inflation outlook," he added. "Gold is the perfect hedge against inflation.

When the dollar loses its value, gold has been seen as the alternate currency since it holds its value."

Gold Hits Fresh Record on Inflation Fears

From FT.com:

Gold prices continued to set fresh highs on Wednesday, as fears about rising inflation kept the yellow metal in demand.

After overtaking its December high of $1,226.10 an ounce on Tuesday, gold reached a fresh peak of $1,243.90 in early European trade.

Gold bugs have been snapping up coins, particularly in Germany and Switzerland, amid fears over the potential inflationary impact of the European Central Bank’s decision to buy eurozone government bonds to tackle the region’s debt crisis.

Edel Tully, precious metals strategist at UBS in London, said that the €750bn eurozone rescue package agreed on Sunday night had done little to slow demand for gold. “The continuation of this heightened appetite after the bail-out was announced shows that these fears have not been allayed.”

Gold prices in euro terms also hit a fresh all-time high of €981.49 an ounce, up 28 per cent since the beginning of the year.