Gold hits record high 1,151$/ounce, dollar drops

Gold futures rose to a record high of US$1,151 an ounce Wednesday, as stronger-than-expected U.S. consumer prices stirred inflation worries.

The dollar fell on a reported plan by Gulf states to stop using the greenback for oil trading.Gold, viewed as a safe-haven investment, has won back favor in recent months as the global economy struggles out of its worst slump in decades. The run-up in gold has been largely driven by weakness in the dollar, which makes dollar-priced commodities cheaper for holders of stronger currencies, boosting demand. The group of 20 leaders of emerging and developed nations (G20) recently agreed at a summit in Pittsburgh against rolling back several massive stimulus measures to help contain the severe global recession.

Peter Schiff, the president of Euro pacific capital (A global investment strategy company) discusses the rise of gold in this video.