BackGold rises to 27-year high as dollar drop spurs global demand
Gold rises to 27-year high as dollar drop spurs global demand
London: Gold rose to a 27-year high in New York and London as the dollar sank to a record low against the euro, spurring demand for alternative investments.
Bullion has advanced 14 % this year, heading for its seventh consecutive annual gain, because investors sought a hedge against inflation as oil rose to a record. Gold assets in funds managed by ETF Securities Ltd, a London-based money manager, more than tripled in the past seven weeks—a record growth.
“Gold is a hedge against everything in life," said Pavel Skitovich, chief executive officer of Moscow-based OAO Polyus Gold, Russia’s biggest gold producer, in an interview in London.
Gold for immediate delivery gained $6.38 (Rs2,546), or 0.9%, to $727.78 an ounce (1 oz is 28.35 grams) in London. Prices earlier climbed to $730.51—the highest since 22 January 1980. The record was $850 an ounce on 21 January 1980.
Gold futures for December delivery gained $5.90, or 0.8%, to $735.40 an ounce in electronic trading on the Comex division of the New York Mercantile Exchange. Prices earlier rose to $738.30—the highest since 11 February 1980. That exceeded a 27-year high of $735.50 set 18 September.
Credit Suisse Group, Switzerland’s second-biggest bank, raised its 12-month forecast for gold to a range of $730-770 an ounce, from a previous forecast of $670-720, according to a report on Wednesday by Tobias Merath, head of commodity research.
Gains accelerated to over $700 an ounce this month on signs investors were seeking a haven from losses in US subprime mortgages. Gold may rise to $800 by the end of this year, said Michael Widmer, director and head of metals research at Calyon Credit Agricole in London.
Skitovich said he has bet a case of Cristal champagne that gold won’t go over $800 this year.
World investment demand will be 306 tonnes in the second half of this year, compared with purchases of 10 tonnes in the first six months of 2007, London-based research company GFMS Ltd forecast last week. “When the euro went to $1.40, we were off to the races," said Jack Allen, head gold trader at Natixis Commodity Markets Ltd in London. “We’ve already seen some new investment demand."
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
