Gold hits fresh 28-year peak on Fed cut
Friday, 2 November 2007
NEW YORK, Nov 1 (Reuters): Gold hit a fresh 28-year peak yesterday as crude oil thundered to a fresh record high and the dollar slumped to all-time lows against major currencies after the US Federal Reserve cut key interest rates.
"I think the dollar will continue to go lower, and the oil market still continues to be a very serious inflationary threat down the line," said Bill O'Neill, partner at LOGIC Advisers in Upper Saddle Valley, New Jersey.
O'Neill said that the Fed's move should not prevent gold from continuing to rise higher.
Spot gold closed at $791.70/792.50 by 2:15pm EDT (1815 GMT) after trading in a broad range. It rose further in late afternoon sessions and was last quoted at $795.40/796.20, after trading as high as $796.50 -- the highest level since January 1980, against $781.25/781.85 in New York late Tuesday.
Most-active December gold on the COMEX division of the New York Mercantile Exchange settled up $7.50, or 1 per cent, at $795.30 an ounce, after trading between $780 and $796.70.
US gold futures briefly breached above $800 in afternoon electronic trading after the end of pit session.
Oil surged more than 5 per cent to a record over $95 a barrel Wednesday after a steep drop in US inventories fueled winter supply concerns and the Fed rate cut.
"Needless to say, the drop in the oil inventory has sparked off the oil price, and that has also sparked off the gold and silver markets," said Andy Montano, a director at bullion dealer ScotiaMocatta in Toronto.
"I think the dollar will continue to go lower, and the oil market still continues to be a very serious inflationary threat down the line," said Bill O'Neill, partner at LOGIC Advisers in Upper Saddle Valley, New Jersey.
O'Neill said that the Fed's move should not prevent gold from continuing to rise higher.
Spot gold closed at $791.70/792.50 by 2:15pm EDT (1815 GMT) after trading in a broad range. It rose further in late afternoon sessions and was last quoted at $795.40/796.20, after trading as high as $796.50 -- the highest level since January 1980, against $781.25/781.85 in New York late Tuesday.
Most-active December gold on the COMEX division of the New York Mercantile Exchange settled up $7.50, or 1 per cent, at $795.30 an ounce, after trading between $780 and $796.70.
US gold futures briefly breached above $800 in afternoon electronic trading after the end of pit session.
Oil surged more than 5 per cent to a record over $95 a barrel Wednesday after a steep drop in US inventories fueled winter supply concerns and the Fed rate cut.
"Needless to say, the drop in the oil inventory has sparked off the oil price, and that has also sparked off the gold and silver markets," said Andy Montano, a director at bullion dealer ScotiaMocatta in Toronto.