Gold price breaks 28-year record to hit new peak
Friday, 4 January 2008
LONDON, Jan 3 (AFP) - Unrest in Pakistan, a faltering dollar and surging oil futures sent the price of gold soaring to a record high yesterday, beating its previous highest level set 28 years ago.
The precious metal rose to 859.20 dollars an ounce, smashing its peak of 850 dollars reached on January 21, 1980.
It later slipped back to 857.75 dollars on profit-taking.
Price movements were slightly exaggerated by the lightness of holiday trade, which meant large transactions could influence the market more than usual, analysts said.
Political unrest in Pakistan has led to interest in gold because the precious metal is regarded as a haven in troubled times.
Benchmark oil prices hit 100 dollars in New York Wednesday for the first time in history.
The yellow metal spiked to its record in 1980 as investors rushed to buy gold because of high inflation sparked by soaring oil prices amid the Iranian revolution.
Gold prices were also winning support from a weak dollar, which fell against the euro Wednesday in the wake of disappointing US manufacturing data, dealers said.
A falling US unit encourages demand for dollar-priced commodities such as gold because it makes them cheaper for buyers using stronger currencies.
Higher oil prices also encourage the buying of gold.
Gold is seen as a defence against inflation, which is being driven in many countries by higher oil prices.
The price of crude hit 100 dollars per barrel in New York for the first time in history, supported by unrest in oil producer Nigeria and the prospect of falling energy inventories in the United States, dealers said.
The price of gold is also rising sharply because of increased jewellery purchases in emerging economic powerhouses China and India, according to the World Gold Council.
The precious metal rose to 859.20 dollars an ounce, smashing its peak of 850 dollars reached on January 21, 1980.
It later slipped back to 857.75 dollars on profit-taking.
Price movements were slightly exaggerated by the lightness of holiday trade, which meant large transactions could influence the market more than usual, analysts said.
Political unrest in Pakistan has led to interest in gold because the precious metal is regarded as a haven in troubled times.
Benchmark oil prices hit 100 dollars in New York Wednesday for the first time in history.
The yellow metal spiked to its record in 1980 as investors rushed to buy gold because of high inflation sparked by soaring oil prices amid the Iranian revolution.
Gold prices were also winning support from a weak dollar, which fell against the euro Wednesday in the wake of disappointing US manufacturing data, dealers said.
A falling US unit encourages demand for dollar-priced commodities such as gold because it makes them cheaper for buyers using stronger currencies.
Higher oil prices also encourage the buying of gold.
Gold is seen as a defence against inflation, which is being driven in many countries by higher oil prices.
The price of crude hit 100 dollars per barrel in New York for the first time in history, supported by unrest in oil producer Nigeria and the prospect of falling energy inventories in the United States, dealers said.
The price of gold is also rising sharply because of increased jewellery purchases in emerging economic powerhouses China and India, according to the World Gold Council.