The price of gold has hit a fresh record of just under $US1600 an ounce with investors worried about the situation in Europe, including the possibility of Europe's third biggest economy Italy defaulting and fears about US debt. The world is worried about financial risks and it's looking at gold as an alternative.
This ties in with the slump in consumer confidence world- wide. Reuters reports that consumer confidence has fallen to its lowest level in a year and a half. Globally, consumers plan to tighten their belts in coming months. That means they won't be spending on everything from stock investing to buying clothes, taking holidays and upgrading technology. Confidence is down in the US, China, Europe and Australia. The most bullish are the Indians and even there, they are a bit more subdued. That's why the ones that can afford it are buying gold.
This will hurt businesses around the world. Not a good time to be a retailer.
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