Gold Rush!

Chart of the Week for September 5-11, 2003

The recent price of gold has reached a seven year high, ending the month of August at over $369 per ounce. Investors who had been stung by the bear market in equities, moved to fixed income investments earlier this year only to experience the worst July for bond mutual funds in 16 years. Historically when investors grow fearful of both stocks and bonds they turn instead to the precious metals. The limited supply and universal acceptance of gold makes it an attractive investment worldwide when economic uncertainty exists. Stocks appear to be in a recovery stage, but with rising interest rates muting bond demand and spurring fears of global inflation, precious metals could be a safer alternative investment.

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