Gold tops $1,500 for first time
April 21, 2011 00:00:00
LONDON, April 20 (Agencies): The gold price has risen above $1,500 an ounce for the first time after concerns about global economic recovery lifted the metal's appeal as a haven.
In Hong Kong trade, gold hit a record $1,500.70 an ounce, which traders said was mainly due to Standard & Poor's downgrade of its outlook on US debt.
Silver also touched a 31-year high of $44.34 an ounce.
Gold reached $1,502.32 an ounce at 0705 GMT. In later trading on the London Bullion Market, gold dipped back under the landmark barrier to stand at $1,499.32.
"Gold remains comfortably underpinned with short-term inflation pressures and economic woes triggering some fresh safe haven inflows," said Andrey Kryuchenkov, commodities analyst at Russian financial group VTB Capital.
The metal is seen as a safe store of value in troubled economic times.
Gold began its surge towards $1,500 on Monday after ratings agency Standard & Poor's revised its outlook on US sovereign debt to "negative" from "stable."
S&P's move challenged Washington's gold-star "AAA"-rated standard as it warned that politicians seemed unable to agree a plan to reduce a huge budget deficit, which is running at around 10 percent of gross domestic product.
The downgrade had also sent global share prices tumbling on Monday, while it came amid growing concerns over global inflation, with China, India and the eurozone struggling to control prices.
Metals consultancy GFMS last week forecast that the gold price would soar past $1,600 this year, driven primarily by fears over high inflation.
Kryuchenkov added: Gold "shot up after S&P downgraded the US sovereign debt outlook to negative. The move came on top of existing economic woes over resurfacing debt troubles in the eurozone."
Gold prices have risen by six percent since the start of the year, breaking a series of record highs along the way. They breached $1,000 for the first time in March, 2008.
"Gold will remain well bid as long as the ongoing debt and inflation worries persist," Ian O'Sullivan, Spread Co trading group analyst told AFP.
Meanwhile, report from New York adds, Oil prices rallied Tuesday in New York, rebounding from the previous day's heavy losses as a weaker dollar boosted demand for dollar-priced commodities.
New York's main contract, light sweet crude for delivery in May, surged $1.03 to finish at $108.15 a barrel.
By contrast, London's Brent North Sea crude for June delivery shed 28 cents to settle at $121.33. The benchmark WTI futures contract had fallen more than $2.50 a barrel Monday after ratings agency Standard & Poor's cut its US sovereign debt outlook to "negative," warning the world's largest oil-consuming nation could lose its top triple-A rating.
After starting the New York session in the red, the market saw "a turnaround in sentiment," with equities rallying and the dollar weakening, said Matt Smith at Summit Energy.
