That makes sense. But what about its stability?
I'm not any kind of expert, but if what palmer says in #97 is true then we're already into a speculative market. If gold can be dug from the ground for less than current market prices, then guaranteed it will come back down someday unless energy prices cause production costs to rise. As far as I know gold doesn't have any kind of cartel controlling it the way that deBeers controls the diamond market, so it will eventually bounce around somewhere a bit above production costs.
I don't know that I agree that gold will continue up very much. Perhaps it will, given all the advertising it's getting, and people are getting out of the real estate market and perhaps will want a place to put their new cash. But I've just seen this speculative gold run-up before, and heard people swear how important it is for years and it just hasn't panned out that way since the early 80's. I'm just not buyin it.