Gold hits fresh record as dollar slides, oil rallies
April 22, 2011 00:00:00
LONDON, Apr 21 (AFP): Gold prices hit record highs for a fifth session Thursday and silver rallied to its strongest since 1980 as the dollar slid to a three-year low against a basket of major currencies and oil prices rallied. The action in the oil and currency markets is adding fuel to a rally sparked by concerns over the US economic outlook, rising inflation, worries over euro zone debt and historically low interest rates in the United States, analysts said.
"On the basis of everything that is going wrong-a possible downgrade in the United States, the situation in Libya not getting any better, the general feeling about the global economic situation-I think gold is going to go higher," said London-based ANZ Bank analyst Peter Hillyard.
"Gold isn't finished yet by a long shot."
Spot gold was bid at $1,507.19 an ounce at 9:53 am, against $1,498.15 late in New York Wednesday, having earlier peaked at $1,508.50 an ounce. US gold futures for June delivery rose $9.40 an ounce to $1,508.30.
Silver was bid at $45.92 an ounce against $45.20.
Gold prices have risen 5.4 per cent so far this month and are on track for a sixth straight week of gains, reflecting strength across the commodity markets. The Reuters-Jeffries CRB index, a global benchmark for commodities, posted its biggest one-day rise in a fortnight Wednesday.
Many have been helped by losses in the dollar, which slid to its lowest since early 2008 against a basket of major currencies Thursday.
Brent crude rose above $124 a barrel as US crude stocks fell unexpectedly last week and the dollar weakened.
Investors have rushed into risky assets due to strong US corporate earnings and signs the global economy is chugging along even as the Federal Reserve stays very cautious about when it will start to unwind its super-loose policy.
A tightening of US monetary policy and eventual rise in interest rates are still viewed as the biggest risk factors for gold, which as a non-interest bearing asset has a lower opportunity cost when rates are depressed.
