A record price for gold, over $1,600 per ounce (Dh207 per gram), does not reflect any sudden increase in global demand for bracelets or chains. Gold prices are best understood as a sort of anxiety index, a reading of how worried the world's investors, principally small ones, are at any given time.
As separate but related US and European debt crises grow, it's easy to understand why stashing a chunk of metal under the mattress can seem like a sound investment these days: millennia of experience appear to promise that gold will retain its value through times of war, inflation, depression or come-what-may.
Indeed, what may come is currently enough to make anyone anxious, as political leaders on both sides of the Atlantic persist in half-measures, euphemisms and tricks to delay the day of reckoning after decades of reckless borrowing and spending. The time for principled courageous honesty is upon them, and their people. But millions of gold hoarders expect the politicians and economic titans to fail the test.
The US debt crisis is the simpler, more artificial and more partisan of the two. The US government, too big to fail but also too big to bail, owes $14.3 trillion and needs to borrow more. But Congress is balking at raising the debt ceiling before the August 2 deadline. This distracting melodrama obscures the less palatable reality that all spending, even on defence and pensions, will have to be tightened substantially before long.
Europe's problem is worse, because the single currency greatly complicates the imposition of fiscal discipline on the more profligate states. For some time Europe's leaders have acted as if they have a choice on how to handle the EU's spendthrift members. But there is no longer - if there ever was - a viable option of just bequeathing the problem to a new generation. European institutions and states must choose: distributed sacrifice now or a disorderly unravelling, or worse, of their currency union and their dream of solidarity.
What the US and EU have in common this summer is that the best way out of these overlapping debt crises is for pain to be shared. In Europe this means a prompt "haircut" - fairly shared sacrifice by banks, other lenders, citizens, and vested interests. In the US it means many years of austerity, including higher taxes.
If courageous leaders can sell those approaches, the world economy can begin to regain its footing. That would be bad news for the gold bulls, but good news for everyone else.