The MasterBlog: UPDATE 6-Gold hovers near lifetime highs, other metals soar
Subscribe to The MasterBlog in a Reader Subscribe to The MasterBlog by Email

MasterBlogs Headlines

Wednesday, November 7, 2007

UPDATE 6-Gold hovers near lifetime highs, other metals soar


UPDATE 6-Gold hovers near lifetime highs, other metals soar
Wed Nov 7, 2007 11:54 AM GMT

(Recasts, adds quotes, changes prices)

By Atul Prakash

LONDON, Nov 7 (Reuters) - Precious metals soared higher on Wednesday on a tumbling dollar and record-high oil, with gold trading near its all-time peak, platinum setting a record and silver touching its highest level in 27 years.

Buying also was spurred by uncertainty in the U.S. credit market and expectations the Federal Reserve will cut interest rates further.

"There is a flood of money coming into gold at the moment. You can't really stand in the way. There are hundreds of things that are supporting the market," Jeremy East, global head of metals trading at Standard Chartered Bank, said.

"It's a one-way street at the moment. Strong oil prices, a weaker dollar, subprime issues and a rush into safe-haven -- everything is supporting," he said.

Spot gold hit a high of $845.40 an ounce, the highest since January 1980 when it was fixed in London at a record high of $850. It was quoted at $843.00/843.80 by 1132 GMT, against $820.90/821.70 late in New York on Tuesday.

Gold has surged more than 32 percent in three months and has doubled in less than three years.

After adjusting for inflation, gold's record level in 1980 was equal to about $2,250 at current prices. Gold surged then on high inflation linked to strong oil prices, Soviet intervention in Afghanistan and the effects of the Iranian revolution.

The dollar fell broadly, hitting a fresh all-time low against the euro and a basket of currencies after comments from senior Chinese officials stirred concerns the central bank might shift reserves away from the U.S. currency.

The euro also was supported by lingering market expectations of a possible U.S. Federal Reserve cut in interest rates in December, and a view that the European Central Bank would keep euro zone interest rates steady for a while.

"It's just possible we could see some profit taking in crude oil, which would take some heat out of the gold market," Tom Kendall, metals strategist at Mitsubishi Corporation, said.

"But we are so close to $850, only a very brave person would go short of gold right now."

MOMENTUM BUYING

A weaker dollar makes gold cheaper for other currency holders and often lifts bullion demand. The metal is also generally seen as a hedge against oil-led inflation.

Oil sped above $98 a barrel for the first time on Wednesday, closing in on the landmark $100 level, driven by a slumping U.S. dollar and worries over a winter fuel supply crunch.

"The momentum is so strong, I can't tell you where it's going to stop. All the factors are in favour of gold," David Holmes, director of metals sales at Dresdner Kleinwort, said.

The physical sector came to a standstill as rising prices scared off jewellery makers in Asia. Dealers in Singapore also noted selling of gold scrap from Indonesia, which is Southeast Asia's largest consumer, as holders cashed in on gold's rally.

In other bullion markets, benchmark Japanese gold futures <0#jau:> rose more than 2 percent to hit a 23-year high. U.S. gold futures also jumped, with the December contract trading up $21.9 at $845.3, having hit a high of $848.

Silver was catching up with gold, and rallied to its highest level since January 1981. Spot silver hit an intraday high of $16.19 ounce, before dipping to $16.00/16.05, still up from $15.37/15.42 in New York.

Platinum hit a record high of $1,484 an ounce to track gold's jump, before dipping to $1,476/1,479, higher than $1,473/1,477 in New York. Palladium rose to $379/382 an ounce from $375/379 in New York. It hit a high of $382 -- its highest since late April. (Additional reporting by Lewa Pardomuan in Singapore)

(Reporting by Atul Prakash; Editing by Michael Roddy)


© Reuters 2007. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.

No comments:

Post a Comment

Commented on The MasterBlog

Tags, Categories

news United States Venezuela Finance Money Latin America Oil Current Affairs Middle East Commodities Capitalism Chavez International Relations Israel Gold Economics NT Democracy China Politics Credit Hedge Funds Banks Europe Metals Asia Palestinians Miscellaneous Stocks Dollar Mining ForEx Corruption obama Iran UK Terrorism Africa Demographics Government UN Living Bailout Military Russia Debt Tech Islam Switzerland Philosophy Judaica Science Housing PDVSA Revolution USA War petroleo Scams articles Fed Education France Canada Security Travel central_banks OPEC Castro Nuclear freedom Colombia EU Energy Mining Stocks Diplomacy bonds India drugs Anti-Semitism populism Arabs Brazil Environment Irak Saudi Arabia elections Art Cuba Food Goldman Sachs Syria Afghanistan Hamas Lebanon Silver Trade copper Anti-Israel Egypt Hizbollah Madoff Ponzi Warren Buffett press Aviation BP Euro FARC Gaza Honduras Japan Music SEC Smuggling humor socialism trading Che Guevara Freddie Mac Geneve IMF Spain Turkey currencies violence wikileaks Agriculture Bolívar ETF Restaurants Satire communism computers derivatives Al-Qaida Bubble FT Greece NY PIIGS Republicans Sarkozy Space Sports BRIC CITGO DRC Flotilla Germany Globovision Google Health Inflation Law Libya Mexico Muslim Brotherhood Nazis Pensions Peru Uranium cnbc crime cyberattack fannieMae pakistan stratfor Apollo 11 Autos BBC Bernanke CIA Chile Climate change Congo Democrats EIA Haiti Holocaust IFTTT ISIS Jordan Labor M+A New York OAS Philanthropy Shell South Africa Tufts Ukraine bitly carbon earthquake facebook racism twitter Atom BHP Beijing Business CERN CVG CapitalMarkets Congress Curaçao ECB EPA ETA Ecuador Entebbe Florida Gulf oil spill Harvard Hezbollah Human Rights ICC Kenya L'Oréal Large Hadron Collider MasterBlog Morocco Nobel Panama Paulson RIO SWF Shiites Stats Sunnis Sweden TARP Tunisia UN Watch Uganda VC Water Yen apple berksire hathaway blogs bush elderly hft iPad journalism mavi marmara nationalization psycology sex spy taxes yuan ALCASA ANC Airbus Amazon Ariel Sharon Australia Batista Bettencourt Big Bang Big Mac Bill Gates Bin Laden Blackstone Blogger Boeing COMEX Capriles Charlie Hebdo Clinton Cocoa DSK Desalination Durban EADS Ecopetrol Elkann Entrepreneur FIAT FTSE Fannie Freddie Funds GE Hayek Helicopters Higgs Boson Hitler Huntsman Ice Cream Intel Izarra KKR Keynes Khodorskovsky Krugman LBO LSE Lex Mac Malawi Maps MasterCharts MasterFeeds MasterLiving MasterMetals MasterTech Microsoft Miliband Monarchy Moon Mossad Mugabe NYSE Namibia Nestle OWS OccupyWallStreet Oman PPP Pemex Perry Philippines Post Office Private Equity Property Putin QE Rio de Janeiro Rwanda Sephardim Shimon Peres Stuxnet TMX Tennis UAV UNHRC VALE Volcker WTC WWII Wimbledon World Bank World Cup ZIRP Zapatero airlines babies citibank culture ethics foreclosures happiness history iPhone infrastructure internet jobs kissinger lahde laptops lawyers leadership lithium markets miami microfinance pharmaceuticals real estate religion startup stock exchanges strippers subprime taliban temasek ubs universities weddimg zerohedge

Subscribe via email

Enter your email address:

Delivered by FeedBurner

AddThis

MasterStats