As Soviet tanks rumbled into Afghanistan in January 1980, panicked investors sought refuge in the ultimate safe haven, gold - boosting bullion prices to a record $850 a troy ounce. At the same time, oil prices were shooting up, driven by instability in the Middle East, and the dollar, amid fears of a US recession, was falling dramatically.
Fast-forward 28 years and all appears roughly the same. Again, trouble in south Asia - this time, the assassination of Benazir Bhutto in Pakistan - has pushed gold to a new high above $860 an ounce this week. Once again, oil prices and fears about the US economy and the direction of the dollar are supporting the move.
Monday, January 21, 2008
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