Gold hits 4th straight record on tumbling dollar

Gold hits 4th straight record on tumbling dollar
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First Published: Mon, Mar 03 2008. 10 08 AM IST
Updated: Mon, Mar 03 2008. 10 08 AM IST
Singapore: Gold edged closer to the $1,000 an ounce mark on Monday, setting a record high for the fourth straight day after the dollar tumbled and crude oil held near an all-time high.
Gold has gained more than 17% in 2008 as investors shift some of their money into the precious metal on expectations of more interest rate cuts in the United States, volatile stock markets and fears of rising energy costs.
Gold jumped as high as $980.75 an ounce, partly driven by purchases from Japanese speculators who took advantage of the dollar’s drop to a three-year low against the yen. Gold was last quoted at $973.30/973.75 in New York on Friday.
“Everybody talks about $1,000. There’s Japanese buying. It’s cheaper for them to buy,” said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong, adding that investors may also book profits when gold eventually hit $1,000. “We could see some selling but I don’t think it will be aggressive. I don’t know what the resistance level is but we can say $970 and $965 will be the support levels,” he said.
Gold’s inflation-adjusted record high was $2,119 an ounce at 2007 prices, according to analysts at metals consultancy GFMS Ltd.
Silver, platinum and palladium also firmed but held below their recent highs, while a firming yen ignited selling in yen-denominated Japanese precious metals futures. The dollar extended falls on Monday and tumbled to a record low against a basket of currencies as worries about the health of US financial firms and fears of a US recession stoked expectations of aggressive rate cuts. Lower interest rates lift gold’s appeal as an alternative investment.
“Sentiment is clearly bullish with weakness of the dollar prompting buying,” said Tatsuo Kageyama, an analyst at Kanetsu Asset Management in Tokyo.
“Gold has more room to rise considering that its pace of rise has been slower relative to other commodities.”
Crude oil held steady near $102 a barrel, supported by a falling US dollar and expectations that OPEC would leave its output unchanged.
Silver edged up to $19.84/19.89 an ounce from $19.80/19.85 an ounce, having reached a 27-year peak of $19.92 an ounce on Friday.
Spot platinum dipped to $2,160/2,167 from $2,163/2,170 ounce late in New York. It hit a record of $2,192 an ounce on 22 February as problems with power supply disrupted mining in main producer South Africa.
A South African minister said on Friday the country’s mining industry would get priority under measures aimed at cutting electricity use to solve a power crisis.
Palladium rose to $572/577 an ounce from $563/568 an ounce late in New York,within sight of last week’s 6-1/2-year high of $582 an ounce.
The most active February 2009 contract on the Tokyo Commodity Exchange ended the morning session 71 yen per gram lower at 6,980 yen.
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First Published: Mon, Mar 03 2008. 10 08 AM IST
More Topics: Markets | Precious | Gold | Silver | Platinum |