Financial Soultions: As Dollar dominance fades, what is the future of Gold?

Oct. 7, 2009 - PRLog -- While Financial Soultions predicts that it is unlikely for any major currency to take over from the dollar soon, there is an ever growing need for an alternative. China is most likely chief among the competition, looking for new alternatives to diversify it’s over $2 trillion in foreign exchange reserves, a large portion of which is from the U.S. Also, the idea of using other currencies to trade oil and commodities is nothing new.
Supply restrictions mean a full revival of the gold standard era, when currencies were attached directly to gold, is obviously impractical, but financiers say gold's double role as both currency and asset make it a most alluring buy for years to come as financial geopolitics add peril into global markets.

"The fact that gold has a currency aspect without being tied to any country is key to enhancing its value as an asset," Financial Soultions understands a financial research firm spokesman as saying.
"The realization that gold can be turned into anything, spread quickly and widely as people used it to raise dollars last year when they were short of dollars."

The gold price fell nearly 20% in October 2008, when the rest of markets crashed during the peak of the credit crunch, but Financial Soultions research shows, comparatively, gold did particularly well where broader commodities and equities hit multi-year lows.

Since October ’08  the per ounce price has swung back into positive momentum, with gold stretching toward the elusive $1000 mark, which the coveted metal achieved earlier this weak, and sources close to Financial Soultions say this could still be just the beginning.

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