Gold breaks $1,700 per ounce

The spot price of gold broke the $1,700-per-ounce level yesterday, as investors began to panic due to the downgrading of America's credit rating. The downgrade pushed world markets down to pre-2008 levels.

The credit-rating downgrade of the world's largest economy, the US, will increase its cost of borrowing money and further erode the stated benefits of the national debt reduction plan. The outlook on US stock futures looks bleak, with investors finding more value in gold and the Japanese Yen and certain emerging market currencies.

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Up, up and away. Gold is increasingly seen as a safe haven from the uncertainty of current world markets.

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With the total US Federal debt standing at over 100 percent of GDP (Gross Domestic Product) and with social entitlement programs such as Social Security and Medicare costing approximately 92 cents of every dollar of federal revenue until 2019, the forecast of the US economy looks like it could be entering another recession. While some have compared the future outlook to the 1939 Great Depression, that event only affected the US. This time, experts warn another recession in America could affect several world markets, as the global economy is intertwined and therefore the ripple effect from the US credit rating downgrade, the austerity measures and bailouts in Europe and rising world energy costs, expect dire consequences for world markets. Some warn that a double-dip recession could happen soon..