The following is a transcript of " Money Girl's Quick and Dirty Tips for a Richer Life, " a podcast from QuickAndDirtyTips.com. The audio program is available via RSS feed here and at TheStreet.com's podcast home page .
Hello and welcome to Money Girl's Quick and Dirty Tips for a Richer Life. Today's topic: Dollars and anti-dollars. Last week, the price of gold reached a 27-year high. So why is it so high? What's up with the price of gold?
Why Is Gold Going Up?
The price of gold tends to go up when the value of the dollar goes down and vice versa. This relationship is the reason that gold has been called the "anti-dollar." Gold offers protection against inflation and is considered to be a safe store of wealth during times of currency devaluation. When individual as well as institutional investors are worried about the value of the dollar going down, they tend to invest more of their money in gold. So, the demand for gold goes up when confidence in the U.S. dollar goes down.