Gold

Just like silver, gold is also up and climbing. And there are lots of news around gold.

First, there is World Bank chief Bob Zoellick who said "Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today." He made further comments that hinted at a gold standard. Amazing, the chief of the World Bank hinting about a gold standard. That is massive news. It was reported instantly. The next day came all the expected retractions and he said he was misinterpreted and that in fact he did not call for a gold standard.

One may think about this as a slip of the tongue or true misinterpretation. Independent of that, he was certainly right when he said "Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today." Why? Gold has been made an official currency for collaterals of large financial transactions. A press announcement from ICE states: "IntercontinentalExchange (ICE), a leading operator of global regulated futures exchanges, clearing houses and over-the-counter (OTC) markets, today announced that ICE Clear Europe will accept gold bullion as collateral for all energy and credit default swaps (CDS) transactions beginning 22 November 2010." With ICE putting this policy in place other operators and clearing houses will have a competitive incentive to follow.

Gold is gaining in importance in the financial world it seems.