As dollar fades, gold's currency shine brightens

8 October 2009  Reuters

As the dollar's dominance fades with the emergence of a multipolar world, gold may stand to gain the most of all assets thanks to an unlikely quality -- neutrality.

While no major currency is likely to replace the dollar anytime soon, the need for an alternative is clear, and growing. China among others is considering how to diversify its more than $2 trillion in foreign exchange reserves; talk of using other currencies to trade oil or commodities continues to circulate.

Supply constraints mean there is no chance of a full revival of the gold standard era, when currencies were pegged directly to gold, but investors say gold's duel role as both currency and asset make it an almost irresistible buy for years to come as financial geopolitics add risk into global markets.

http://www.reuters.com/article/newsOne/idUSTRE5963BX20091007