There’s More to the Gold Rally than European Market Fears
By GCRU Gold News on Saturday, January 24 2015, 02:08 - Permalink
This is what largely drives gold demand: confidence in the metal as a store of value, in good times and in bad. Gold is much more than a commodity—it’s a form of currency, one that “has never required the credit guarantee of a third party,” as former Federal Reserve Chair Alan Greenspan made clear in September.
Last year, gold was the second-strongest currency in the world, trailing only the U.S. dollar. It’s amazing how well it held up under the pressure of the greenback. Not just investors but also central banks recognize this.
“If the dollar or any other fiat currency were universally acceptable at all times,” Greenspan said, “central banks would see no need to hold any gold. The fact that they do indicates that such currencies are not a universal substitute.”