With many stock markets in the red and Dow Jones headed for worst April since 1932, gold could even reach $4,000
Gold has risen above $3,500 an ounce for the first time while many stock markets are in the red and the US dollar hit a three-year low, after Donald Trump’s blistering attack on the Federal Reserve chair, Jerome Powell, caused alarm among investors.
Spot gold reached the record price on Tuesday morning, extending a rally that has pushed bullion up from $2,623 an ounce at the start of this year. Analysts now predict the metal could even reach $4,000 only a matter of weeks after the price moved through $3,000 for the first time.
The US currency and its government debt are usually seen as a safe haven during times of market turmoil, but as America itself has caused much of the recent volatility investors have been turning to another “port in the storm”, gold, in large numbers.
But who is going to want it? You could buy things like hatchets that will last and are easily traded.
Copper tubing to make stills will be the most valuable currency.
Eventually, you’ll need a consistent currency.
If a farmer needs to buy an axe but his crops are still growing, what does he use? His plow? Sheep? Daughter? He needs all of these things to keep his farm going.
He needs credit but he doesn’t want the axe to cost a fortune in crops with interest. And the axe maker doesn’t want the risk of handing out axes if crops fail.
What if there’s a way to store credit? Something durable, rare and easily divisible like gold is perfect. Farmer can trade crops for gold. Now, he has something he can trade over the winter and while crops grow in the summer.
It doesn’t have to be gold but it should be rare or tightly controlled to avoid runaway inflation. Bartering doesn’t scale. You need a currency and gold works.
You're putting the cart before the horse. In America, the term for a dollar is 'one buck.' That comes from the early colonial days when one deer skin [aka buck skin] was the common currency. Trade is possible without a currency. In the early days, access to things like tools and drugs will be far more valuable.