Gold hits $800
Sunday, 4 November 2007
NEW YORK/LONDON, Nov 3 (Reuters): Gold hit $800 yesterday for the first time in 28 years as record-high oil prices, all-time lows in the dollar and the global credit crunch made investors take cover in the safe haven of the precious metal.
Oil, for its part, re-energized from Thursday's sell-off to race again towards the $100-a-barrel target coveted by bulls.
Futures of agricultural products from wheat to corn and soybeans also traded higher.
Only industrial metals had a different story, with copper prices sinking to eight-week lows on weaker consumption.
Still, traders and forecasters were starry-eyed over the prospects in commodities, particularly gold which broke a psychological level that had taunted it for almost two years.
"This market is definitely going to $850 -- you have my word on that," said Peter Hillyard, head of metals sales at ANZ Investment Bank.
Most-active gold futures for December delivery rose to a record $811 an ounce on the New York Mercantile Exchange's COMEX metals division before ending the official trading session at $808.50, up $14.80 or 1.9 per cent.
At that level, the COMEX gold market is up nearly $300, or 60 per cent, from November 2005.
Spot gold in the bullion market surged as high as $807.70 an ounce and was hovering around $805.00/$805.80 in late afternoon trade in New York, against Thursday's comparative levels of $792.30/793.10.
A weaker dollar makes gold cheaper for non-US investors and often lifts bullion demand for the precious metal. The dollar plummeted to all- time lows against the euro and a major currency basket Friday on persistent worries about credit and unreported losses at financial firms, which overshadowed a strong US payrolls report.
Gold is also seen as a hedge against oil-led inflation.
US light crude oil settled up $2.44 at $95.93 a barrel. It surged during the session to $96, just short of this week's $96.24 record. London's Brent crude closed $2.36 higher at $92.08 a barrel.
Concerns about tight oil supplies ahead of the Northern Hemisphere winter, the weak dollar and rising speculator buying have taken prices 40 per cent higher since August.
Prices of corn and soybeans, both sources of green fuels, piggybacked on the oil rally.
Oil, for its part, re-energized from Thursday's sell-off to race again towards the $100-a-barrel target coveted by bulls.
Futures of agricultural products from wheat to corn and soybeans also traded higher.
Only industrial metals had a different story, with copper prices sinking to eight-week lows on weaker consumption.
Still, traders and forecasters were starry-eyed over the prospects in commodities, particularly gold which broke a psychological level that had taunted it for almost two years.
"This market is definitely going to $850 -- you have my word on that," said Peter Hillyard, head of metals sales at ANZ Investment Bank.
Most-active gold futures for December delivery rose to a record $811 an ounce on the New York Mercantile Exchange's COMEX metals division before ending the official trading session at $808.50, up $14.80 or 1.9 per cent.
At that level, the COMEX gold market is up nearly $300, or 60 per cent, from November 2005.
Spot gold in the bullion market surged as high as $807.70 an ounce and was hovering around $805.00/$805.80 in late afternoon trade in New York, against Thursday's comparative levels of $792.30/793.10.
A weaker dollar makes gold cheaper for non-US investors and often lifts bullion demand for the precious metal. The dollar plummeted to all- time lows against the euro and a major currency basket Friday on persistent worries about credit and unreported losses at financial firms, which overshadowed a strong US payrolls report.
Gold is also seen as a hedge against oil-led inflation.
US light crude oil settled up $2.44 at $95.93 a barrel. It surged during the session to $96, just short of this week's $96.24 record. London's Brent crude closed $2.36 higher at $92.08 a barrel.
Concerns about tight oil supplies ahead of the Northern Hemisphere winter, the weak dollar and rising speculator buying have taken prices 40 per cent higher since August.
Prices of corn and soybeans, both sources of green fuels, piggybacked on the oil rally.