Gold nears record high
Friday, 18 September 2009
LONDON, Sept 17 (AFP): The price of gold neared a record high yesterday as investors turned to the precious metal in response to mixed signals pointing to both an economic recovery and continued uncertainty.
The precious metal hit 1,022.72 dollars an ounce on the London Bullion market at midday-its highest level since March 17, 2008 when it reached a record of 1,032.70 dollars amid rising market turmoil last year.
The price then fell back to 1,015.75 dollars an ounce later on Wednesday.
Gold is being pushed up by two main trends: a fall in the value of the US currency as a result of rising economic confidence among some investors and a desire among other investors to find a safe haven in still troubled waters.
"Price momentum could slow in the short term" for gold but "we believe the macro environment could turn more favourable for gold as inflation concerns kick in and the dollar continues to weaken," Barclays Capital analysts said.
Economic optimism was boosted Tuesday when US Federal Reserve chairman Ben Bernanke suggested the US recession could finally be over, prompting traders to buy riskier currencies such as the euro instead of the safer dollar.
A jump in US retail sales and steady commodity markets further helped reduce the appeal of the safe-haven dollar, which dropped to nine-month lows.
A struggling US unit makes dollar-priced gold cheaper for holders of stronger currencies and therefore tends to boost demand.
The precious metal hit 1,022.72 dollars an ounce on the London Bullion market at midday-its highest level since March 17, 2008 when it reached a record of 1,032.70 dollars amid rising market turmoil last year.
The price then fell back to 1,015.75 dollars an ounce later on Wednesday.
Gold is being pushed up by two main trends: a fall in the value of the US currency as a result of rising economic confidence among some investors and a desire among other investors to find a safe haven in still troubled waters.
"Price momentum could slow in the short term" for gold but "we believe the macro environment could turn more favourable for gold as inflation concerns kick in and the dollar continues to weaken," Barclays Capital analysts said.
Economic optimism was boosted Tuesday when US Federal Reserve chairman Ben Bernanke suggested the US recession could finally be over, prompting traders to buy riskier currencies such as the euro instead of the safer dollar.
A jump in US retail sales and steady commodity markets further helped reduce the appeal of the safe-haven dollar, which dropped to nine-month lows.
A struggling US unit makes dollar-priced gold cheaper for holders of stronger currencies and therefore tends to boost demand.