Gold hovers near lifetime highs!
Wed Nov 7, 2007
By Atul Prakash, Reuters 2007
LONDON, Nov 7 (Reuters) - Precious metals soared higher on Wednesday on a
tumbling dollar and record-high oil, with gold trading near its all-time peak,
platinum setting a record and silver touching its highest level in 27 years.
Buying also was spurred by uncertainty in the U.S. credit market and expectations
the Federal Reserve will cut interest rates further.
"There is a flood of money coming into gold at the moment. You can't really stand in
the way. There are hundreds of things that are supporting the market," Jeremy
East, global head of metals trading at Standard Chartered Bank, said.
"It's a one-way street at the moment. Strong oil prices, a weaker dollar, subprime
issues and a rush into safe-haven -- everything is supporting," he said.
Spot gold <XAU=> hit a high of $845.40 an ounce, the highest since January 1980
when it was fixed in London at a record high of $850. It was quoted at
$843.00/843.80 by 1132 GMT, against $820.90/821.70 late in New York on Tuesday.
Gold has surged more than 32 percent in three months and has doubled in less than
three years. After adjusting for inflation, gold's record level in 1980 was equal to
about $2,250 at current prices. Gold surged then on high inflation linked to strong
oil prices, Soviet intervention in Afghanistan and the effects of the Iranian
revolution.
The dollar fell broadly, hitting a fresh all-time low against the euro and a basket of
currencies after comments from senior Chinese officials stirred concerns the central
bank might shift reserves away from the U.S. currency.
The euro also was supported by lingering market expectations of a possible U.S.
Federal Reserve cut in interest rates in December, and a view that the European
Central Bank would keep euro zone interest rates steady for a while.
"It's just possible we could see some profit taking in crude oil, which would take
some heat out of the gold market," Tom Kendall, metals strategist at Mitsubishi
Corporation, said.
"But we are so close to $850, only a very brave person would go short of gold right
now."
MOMENTUM BUYING
A weaker dollar makes gold cheaper for other currency holders and often lifts
bullion demand. The metal is also generally seen as a hedge against oil-led inflation.
Oil sped above $98 a barrel for the first time on Wednesday, closing in on the
landmark $100 level, driven by a slumping U.S. dollar and worries over a winter
fuel supply crunch.
"The momentum is so strong, I can't tell you where it's going to stop. All the factors
are in favour of gold," David Holmes, director of metals sales at Dresdner
Kleinwort, said.
The physical sector came to a standstill as rising prices scared off jewellery makers
in Asia. Dealers in Singapore also noted selling of gold scrap from Indonesia, which
is Southeast Asia's largest consumer, as holders cashed in on gold's rally.
In other bullion markets, benchmark Japanese gold futures rose more than 2
percent to hit a 23-year high. U.S. gold futures also jumped, with the December
contract trading up $21.9 at $845.3, having hit a high of $848.
Silver was catching up with gold, and rallied to its highest level since January 1981.
Spot silver hit an intraday high of $16.19 ounce, before dipping to $16.00/16.05, still
up from $15.37/15.42 in New York.
Platinum hit a record high of $1,484 an ounce to track gold's jump, before dipping
to $1,476/1,479, higher than $1,473/1,477 in New York. Palladium rose to $379/382
an ounce from $375/379 in New York. It hit a high of $382 -- its highest since late
April. (Additional reporting by Lewa Pardomuan in Singapore)
(Reporting by Atul Prakash; Editing by Michael Roddy)
Wed Nov 7, 2007
By Atul Prakash, Reuters 2007
LONDON, Nov 7 (Reuters) - Precious metals soared higher on Wednesday on a
tumbling dollar and record-high oil, with gold trading near its all-time peak,
platinum setting a record and silver touching its highest level in 27 years.
Buying also was spurred by uncertainty in the U.S. credit market and expectations
the Federal Reserve will cut interest rates further.
"There is a flood of money coming into gold at the moment. You can't really stand in
the way. There are hundreds of things that are supporting the market," Jeremy
East, global head of metals trading at Standard Chartered Bank, said.
"It's a one-way street at the moment. Strong oil prices, a weaker dollar, subprime
issues and a rush into safe-haven -- everything is supporting," he said.
Spot gold <XAU=> hit a high of $845.40 an ounce, the highest since January 1980
when it was fixed in London at a record high of $850. It was quoted at
$843.00/843.80 by 1132 GMT, against $820.90/821.70 late in New York on Tuesday.
Gold has surged more than 32 percent in three months and has doubled in less than
three years. After adjusting for inflation, gold's record level in 1980 was equal to
about $2,250 at current prices. Gold surged then on high inflation linked to strong
oil prices, Soviet intervention in Afghanistan and the effects of the Iranian
revolution.
The dollar fell broadly, hitting a fresh all-time low against the euro and a basket of
currencies after comments from senior Chinese officials stirred concerns the central
bank might shift reserves away from the U.S. currency.
The euro also was supported by lingering market expectations of a possible U.S.
Federal Reserve cut in interest rates in December, and a view that the European
Central Bank would keep euro zone interest rates steady for a while.
"It's just possible we could see some profit taking in crude oil, which would take
some heat out of the gold market," Tom Kendall, metals strategist at Mitsubishi
Corporation, said.
"But we are so close to $850, only a very brave person would go short of gold right
now."
MOMENTUM BUYING
A weaker dollar makes gold cheaper for other currency holders and often lifts
bullion demand. The metal is also generally seen as a hedge against oil-led inflation.
Oil sped above $98 a barrel for the first time on Wednesday, closing in on the
landmark $100 level, driven by a slumping U.S. dollar and worries over a winter
fuel supply crunch.
"The momentum is so strong, I can't tell you where it's going to stop. All the factors
are in favour of gold," David Holmes, director of metals sales at Dresdner
Kleinwort, said.
The physical sector came to a standstill as rising prices scared off jewellery makers
in Asia. Dealers in Singapore also noted selling of gold scrap from Indonesia, which
is Southeast Asia's largest consumer, as holders cashed in on gold's rally.
In other bullion markets, benchmark Japanese gold futures rose more than 2
percent to hit a 23-year high. U.S. gold futures also jumped, with the December
contract trading up $21.9 at $845.3, having hit a high of $848.
Silver was catching up with gold, and rallied to its highest level since January 1981.
Spot silver hit an intraday high of $16.19 ounce, before dipping to $16.00/16.05, still
up from $15.37/15.42 in New York.
Platinum hit a record high of $1,484 an ounce to track gold's jump, before dipping
to $1,476/1,479, higher than $1,473/1,477 in New York. Palladium rose to $379/382
an ounce from $375/379 in New York. It hit a high of $382 -- its highest since late
April. (Additional reporting by Lewa Pardomuan in Singapore)
(Reporting by Atul Prakash; Editing by Michael Roddy)
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