(Image source: Mercantile Diamond Group)

BY GRACE MEINERS

Is it a twenty-first century gold rush? Well, it appears so looking at the market this week. Gold hit an all-time high Tuesday reaching more than $1,400 an ounce -- almost tripling in value since July.

“Don’t forget, gold is completing its tenth up year, and anyone who has bought it, is up nicely on it, as opposed to stocks, which only makes its investments seem more charmed and more desirable. Quite simply, gold’s a terrific place to be.” (CNBC)

But that’s not the biggest golden story this week. Robert Zoellick -- president of the world bank --  wrote an opinion piece Monday, and many saw it as a call to returning to the gold standard-- a monetary system where the standard unit is a fixed weight of gold.

“The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values.”

Was he demanding a return to the gold standard? Maybe not.  In a follow up, Zoellick says he was merely calling for a discussion about a new world economy. The Wall Street Journal says Zoellick was clear as mud about his golden ambitions.

“He’s deliberately sketchy on the role he envisions for gold, calling it a ‘reference point’ and an ‘alternative monetary asset,’ and not defining those terms in great detail.”

Though Zoellick was criticized for the article, the President of Euro Pacific Capital tells The Street, returning to the gold standard wouldn’t be such a bad idea.

“The gold standard worked very well for a long time, and we’re about to experience the real ravages of paper money, and we’re about to experience first-hand why the founding fathers put us on a gold standard. They did it because they understood the dangers of paper money.”

Many in the media say fear and uncertainty are driving people to invest in gold—in an effort to hedge themselves against the possible inflationary pressures Quantitative Easing might cause. The president of Randgold, one of the world’s biggest gold mining companies, says it’s prime time for gold.

“The stars are aligned for higher gold prices. One because despite the $900 increase in the gold price over the last five years, the industry is still largely ex-growth. So there’s a shortage of gold. And on top of that, there’s the anxiety within the global economy.”

So is all that glitters in this economy truly gold? Or is it a golden bubble about to burst? A blogger for the Atlantic thinks so. She says gold is neither a good investment nor currency, except when investors are scared.

“It’s an excellent way to lose money by buying when you’re panicking and then having to sell out as it’s on its way down. Given that the price has already risen more than fourfold from a decade ago, this looks particularly likely right now.”

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