For the past two years, the relationship between the dollar, stocks and gold was strong. When the dollar dropped, stocks and gold rose, and vice versa, nearly all the time. But since New Year's Day, that link has completely vanished, which is terrible news for the gold bugs.
Gold is on a record bull run, up from $328 in 2002 to $1,375 an ounce today. What caused that steep rise wasn't any inherent increase in gold's value to society, but a clever marketing scheme that allowed it to be traded easily without the hassle of physical delivery: The SPDR Gold ETF.
Recent reports show that several banks have begun advising their wealthiest individual clients to put as much as 10% of their assets into the precious metal. And some are stocking up by the ton.
Gold prices reached a record $1,308.90 an ounce Tuesday after earlier price declines and continued low interest rates spurred investors to buy bullion. Gold, which earlier had its biggest intraday decrease in more than two months, reached a record high for the eighth time in two weeks.
