What’s behind the 2010 gold rush?

Investors and central banks are buying up the yellow metal at unprecedented levels, but will its allure last as fears over the global economy ease?

Richard Blackden

In the 19th century, San Francisco’s citizens couldn’t read about the gold rush happening little more than 200 miles from their city.

Most who worked for the local newspaper had dashed to the fields in the foothills of the Sierra Nevada mountains, where James W Marshall had unearthed a nugget in a riverbed in January 1848.

Rapid waves of immigration followed by ship and across the Midwest, with about 80,000 people braving the threat of cholera to make the journey in wagons.

Less than a month after Marshall’s find and a few hundred miles further south, a defeated Mexican government signed the Treaty of Guadalupe Hidalgo, ending a two-year war with its northern neighbour and ceding swathes of territory to the US.

“The discovery of gold was little short of a revolution and came as California became American,” explains Malcolm Rohrbough, author of Days of Gold: The Californian Gold Rush and the American Nation. “People were celebrating.”

The yellow metal had of course dazzled many civilizations before, and from the middle of the 19th century added America to that list.

It has bewitched the country ever since and never more so than in the three years since the financial crisis erupted.

And as gold closes in on a 10th straight year of gains, a debate is raging across the country on whether the longest rally since at least 1920 can last.

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