Midas’ Climb

If you would have predicted, two years ago, that gold would climb to $1070 per ounce, you would have been denounced as a crank. Alas, today gold hit just that mark because of mounting debt in Europe and the United States, causing the dollar to dip against the Euro. Greece, which is deep in debt, may be bailed out by the European Union–if that happens we can expect it to have major effects on the dollar, the Euro, and even the price of gold.

News that European Central Bank President Jean-Claude Trichet was leaving a meeting of central bankers in Sydney early to attend a European Council meeting on February 11 prompted speculation a plan was being discussed.

If these issues are successfully addressed, it is likely to boost the euro, which in turn should help gold.

Analysts said the dollar, which has rallied due to euro-zone’s problems, may slip later in the year.

The plan to bail out Greece is nothing more than speculation at this point–but it will be interesting to see how that speculation affects the market.