Bernard Hickey talks above in a Double Shot interview with NZ Mint's Head of Bullion Mike O'Kane about precious metals in their regular monthly roundup on precious metals. See the last roundup here.
They spoke on Wednesday afternoon when prices were around US$1,775/oz. They have since risen to over US$1,800/oz by mid afternoon on Thursday.
O'Kane said the inflation-adjusted record highs hit in 1980 were between US$1,900/oz and US$2,200/oz, depending on which inflation measure was used.
Gold had risen in New Zealand dollar terms in recent weeks as the New Zealand dollar has come off its highs.
Gold had risen against all currencies, he said.
America's credit rating downgrade last week and the after effects of the US Federal Reserve's two rounds of quantitative easing (QE) or money printing since 2008 were the driving forces behind the rise in gold as investors sought protection from inflation, O'Kane said.
The Fed's decision to announce this week the Fed funds rate would stay at 0% for the next two years was also a factor.
Central banks, hedge funds and individual investors had all been buying in recent months.
"We're seeing an influx of new clients we haven't seen since 2008," he said, adding however that many who bought in 2008 were taking profit," he said.
"Mostly it's the flight to safety. They're concerned about the problems in the Eurozone, problems in the US, problems in the stock market, problems with bonds and problems with property values," he said.
Silver's divergence
O'Kane also pointed to a relative divergence in the prices of silver and gold in recent months.
Silver prices had fallen this week. "It's more an indicator that silver is more industrial than financial," he said.
Lead?
O'Kane acknowledged that gold may not be the most useful metal in the extraordinary event of a complete meltdown in global financial and banking systems.
"If there is a complete meltdown I have a joke that the only thing that's going to be really useful is lead in the form of bullets. If your concern is the apocalypse, then you'd be best stocking up on water and canned goods, not financial assets," he said.
Although he noted that gold had been used for thousands of years as a medium of exchange and was still used extensively in electronics.
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