close
Advertisement
Can't connect right now! retry

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!
October 2, 2010

Gold at record high for sixth day

Business

October 2, 2010

LONDON: Gold hit record highs for a sixth successive session on Friday as the dollar fell to a six-month low against the euro, with expectations for further U.S. monetary easing driving strong demand for the precious metal.
Spot gold touched a peak of $1,317.80 and was bid at $1,315.50 an ounce at 1248 GMT, against $1,305.25 late in New York on Thursday. U.S. gold futures for December delivery rose $7.20 to $1,316.80.
Gold looks resilient after ending September with its eighth consecutive quarterly gain, analysts say, having risen 6 percent in the third quarter.
“Gold seems to be following the weak dollar,” said Afshin Nabavi, head of trading at MKS Finance. “These levels are really uncharted territory, but should the dollar weakness continues, it looks like $1,325 may be the next resistance.”
The dollar accelerated losses against the euro on Friday after New York Federal Reserve Bank President William Dudley said more Fed action is warranted unless the U.S. economic outlook improves.
Dollar weakness tends to benefit gold, as it boosts gold’s appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies. With the U.S. currency seen extending losses to the end of the year, gold is expected to benefit.
“The U.S. dollar had its worst month since May 2009 against a basket of currencies and its worst quarter since April 2002, as it continued to come under pressure over concerns that the Federal Reserve is poised to fire the starting gun on further asset purchases,” said CMC Markets analyst Michael Hewson.
“Early indications suggest that these US dollar declines look set to continue for now as we head into a new month, and the final quarter of 2010, as the U.S. dollar index heads back towards levels last seen in January this year.”
On the physical side of the market, a Singapore-based trader reported firm gold demand from Thailand and India, where buyers appear to be becoming

acclimatised to record-high prices.
Holdings of the world’s largest gold-backed exchange-traded fund, New York’s SPDR Gold Trust, dipped however by just under one ton to 1,304.776 tons.
From a technical perspective, gold looks poised for further strong gains, according to Reuters’ Singapore-based market analyst Wang Tao. He expects prices to rise to $1,539 per ounce over the next three months.
Silver was bid at $21.94 an ounce against $21.70. The metal has outperformed gold this year, rising 30 percent against gold’s 20 percent climb.
However, UBS analyst Edel Tully said in a note that silver may be more vulnerable to a near-term correction than gold.
“Much of silver’s move having been technically driven, the gold/silver ratio this week pulling back below 60 for the first time since October last year may convince many buyers to take profit,” she said.
“A pullback would be particularly unsurprising because silver is notoriously volatile, its price regressions typically being a lot more violent than gold’s.”
“On the other hand, mounting QE expectations ahead of the November 3 FOMC meeting should support gold, which will also help silver,” she added. “And silver has also seen decent industrial demand as well as investor buying.”
Gold’s strength lifted platinum to a 4-1/2 peak at $1,684.50. It was later at $1,678 an ounce against $1,651.15, while palladium was at $572.50 against $563.93.

Topstory minus plus

Opinion minus plus

Newspost minus plus

Editorial minus plus

National minus plus

World minus plus

Sports minus plus

Business minus plus

Karachi minus plus

Lahore minus plus

Islamabad minus plus

Peshawar minus plus