Factors Align in Gold's Favor

A confluence of fundamental and monetary factors has the gold bugs licking their chops again.

Gold, which has traditionally been a safe haven for investors in times of financial turmoil, has posted net gains this year, though it's been a bumpy ride. After a 25% rally in 2002, gold started this year at $344.8 an ounce and has swung both up and down by double-digit percentages, recently settling at about $360.

Analysts attribute the net 4.6% rise in 2003 primarily to a drop in the U.S. dollar. When the dollar falls, gold often rises, because investors lose confidence in paper currency.

Dusted on Cool

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