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Gold hits record high on surging oil, euro

Gold hits record high on surging oil, euro
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First Published: Wed, Feb 27 2008. 09 59 AM IST
Updated: Wed, Feb 27 2008. 09 59 AM IST
Singapore: Gold roared above $955 an ounce on Wednesday to its highest ever, with investors pouring money into the metal after oil hit a record above $101 a barrel and the US dollar tumbled against other currencies.
Spot gold rose as high as $955.70 an ounce, with buying particularly from investors and speculators in Japan. It was up from $946.60/947.40 late in New York on Tuesday and has gained more than 14% this year.
Silver hit a 27-year high and palladium jumped to its best level in more than six years.
“Investors are still very concerned about the fluctuations and troubles in other markets,” said Darren Heathcote of Investec Australia in Sydney.
“Let’s just say $970 is not inconceivable. As I guess $1,000 is not inconceivable. There doesn’t seem to be much reason to sell gold,” he said.
Weak economic data and comments from the Federal Reserve’s No.2 provided more proof that US interest rates will continue to head lower, pushing the dollar below the psychologically crucial $1.50 level against the euro to a record low and spurring a broad-based commodities rally. “The stock markets and oil are going up and that attracts buying interest. Going ahead, we are talking about $970,” said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong, who pegged support at $930 an ounce.
Gold shrugged off any worries about sales by the IMF of some of its bullion reserves, which Leung said would be done in stages and in limited quantity and were unlikely to cause a sharp drop in gold prices.
The United States Treasury has reversed its opposition to the sale of a limited portion of the IMF’s more than 3,000 tonnes of gold stocks, the world’s third-largest holding, and was confident Congress would support the move.
US gold futures also hit record highs. Gold for April delivery the most active contract, on the COMEX division of the New York Mercantile Exchange hit a high of $959 an ounce, up from Tuesday’s settlement of $948.90 an ounce.
Silver jumped as high as $19.16 an ounce, its best level in 27 years. The metal was last quoted at $18.65/18.70 late in New York on Tuesday.
Spot platinum rose to $2,146/2,153 an ounce from $2,130/2,140 an ounce but off last week’s record high of $2,192 an ounce.
Palladium rose as high as $540 an ounce, its best level in more than six years, up from $523/528 late in New York.
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First Published: Wed, Feb 27 2008. 09 59 AM IST
More Topics: Markets | Precious | Gold | IMF | Dollar |