Precious Little to Halt Rising Fear Factor
It's not the price of gold that's going up. It's the price of fear.</br></br>And fear has just passed $1,900 an ounce. Gold prices have already risen 46% since the start of the year and a whopping 19% this month alone.</br></br>Behind these gains lies an intensifying fear that the monetary and fiscal authorities can get nothing right and everything wrong in their attempts to fix the fiscal problems in the world's ailing economies. "The fear component [of gold buying] is driven by the negative real interest rates, the excessive government debt, and the rising fear of a collapse of the system," reckoned Austrian-based Erste Group's Ronald-Peter Stoferle. "Gold remains an excellent hedge against worst-case scenarios," he added.</br></br>There's nothing new here. Ancient kings got buried with their gold because they feared the afterlife and thought bringing some gold could help them with scenarios far worse than the inflation feared by modern-day fund managers.</br></br>The question is: when does the fear stop and the price of gold start going into reverse?