How did gold ever reach $1400 an ounce? Many experts have said that it would happen, yet it seemed so far away ten years ago, when gold was trading for around $300 an ounce. Now, investors and central banks alike are spurring prices higher than ever before as demand is peaking out of fear of sustained financial chaos.

Both casual and professional investors alike are buying gold bullion and gold coin investments to round out and shelter their portfolios. While the traditional recommendation is to invest no more than ten percent of your portfolio in precious metals, the conventional rules of the game have changed substantially. Some casual investors are “Wall Street weary” and have opted to put up to fifty percent of their portfolio in the yellow metal. Fearing manipulation of gold mining stocks and ETFs by financial managers, investors run to the safety of real gold bullion and coins.

It’s not just the weak dollar that dictates the price of gold. All currencies are somewhat instable, which leads to worldwide interest in the yellow metal. And it’s not just individual investors who are driving up the price of gold bullion – Asian central banks have been increasing their own stores of the metal. From China to Thailand, central banks are exchanging their dollars for gold. China is also pushing its budding middle class to invest heavily in precious metals. Because China has such serious buying power, it exerts considerable influence over the price of gold bullion.

Weak currencies are traditionally good for gold, because the yellow metal is priced in terms of dollars. Foreign investors can buy more gold for less money when the dollar is cheaper than their own currency. Gold is viewed as a “quality” currency whenever trouble is afoot in the world, be it war or debt in Europe and the U.S.

Because the Fed has recently announced that it will buy up Treasury bonds to stimulate the economy, fears are intensifying that the dollar will continue to devalue and inflation will be omnipresent. World leaders are angered by this move, because a weak dollar pushes the price of all of their commodities up. What happens in the U.S. doesn’t stay in the U.S. – it ripples around the world. Until the U.S. can stabilize its dollar and economy, look for the price of gold to press upward. The gold bubble will not end until the nation’s unemployment rate is dramatically reduced and the American dream is restored.