Gold Rises on Weak Dollar

The price of gold is one of those canaries in the coal mine in regards to an excess of paper floating around, we can only hope they trend slows down and a weakening dollars doesn't futher dilute the purchasing power of middle and working class Americans:

Sept. 2 (Bloomberg) -- Gold rose the most in more than five months as slumping global equity markets and a weakening dollar spurred demand for the precious metal as an alternative investment. Silver touched an 11-week high.

The MSCI World Index of shares fell for a third day, touching the lowest level in almost two weeks. The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, fell as much as 0.6 percent. Gold has rallied 11 percent this year while the dollar index is down 3.6 percent.

“The global mood shift away from risk assets has investors rushing to seek comfort in gold,” said Al Abaroa, a senior commodities strategist at OptionsPro Corp. in Plantation, Florida. “We would look for a temporary decoupling effect in the dollar as well.”

Gold futures for December delivery gained $22, or 2.3 percent, to $978.50 an ounce on the New York Mercantile Exchange’s Comex unit, the biggest gain since March 19.“The next target is the February 20th high at $1,007.70 an ounce, which could be tested within a couple weeks,” Tom Pawlicki, an MF Global Inc. analyst in Chicago, said by e-mail.

I could think of 9 trillion reasons this is happening. On a side note the price of silver also has jumped.