Sabtu, September 25, 2010

Gold hits record, nears US$1,300

LONDON: Gold soared to record highs within a whisker of US$1,300 (US$1 = RM3.10) yesterday, dragging sister metal silver to a 30-year peak as investment demand propelled precious metals higher.

Gold prices struck a record US$1,299.90 an ounce in midday trade on the London Bullion Market as investors sought a safe haven for their money amid increased uncertainty over the global economic outlook.

Silver, meanwhile, jumped to US$21.41 an ounce - its highest level since October 1980.

"The underlying bullish trend in the gold market continues to be fuelled by the high level of uncertainty regarding the US and European economies," said SEB Commodity Research analyst Filip Petersson.


"Wealth preservation are the keywords.

"As long as we do not see a reduction in the uncertainty regarding the long-term economic outlook, gold prices will remain well-supported as the currency of choice for risk-averse investors."

He added that "the strategic view remains bullish (positive) and we expect prices above US$1,350 an ounce before the end of the year." Gold and silver were also driven by keen demand from exchange traded funds (ETFs).

ETFs allow traders to invest money easily in commodities, without trading on the futures market. They are traded like shares and are regarded as an inexpensive and low-risk way of investing.

"Gold is fuelled by a combination of things," said Commerzbank analyst Daniel Briesemann.

"High investment demand can be seen in inflows into gold ETFs," added Briesmann.

"Some central banks in Asia are also diversifying their currency reserves further, even at the current high price levels.

"Furthermore, the general interest of investors is not waning and gold is sought for mainly as a 'stable currency'."

Gold also won support from the weakening US currency, which makes the dollar-priced metal cheaper for buyers using stronger currencies and so tends to stimulate demand and prices. - AFP

Read more: Gold hits record, nears US$1,300 http://www.btimes.com.my/Current_News/BTIMES/articles/gold24/Article/index_html#ixzz10Vou8re1

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