Gold scores record high near US$1,200

LONDON: Gold prices soared to a record pinnacle close to US$1,200  an ounce here yesterday, as demand for the precious metal was boosted by the weak US currency and a host of other factors, analysts said.

GOLDEN TIGER: Japan’s Seibu department store sales clerk displays a pure gold made tiger ornament and 10 gold coins in a wooden box for the New Year lucky bag priced at US$23,100 to celebrate the Year of the Tiger for 2010 during a press preview in Tokyo yesterday.  The department store will sell the lucky bag on January 2, 2010, the first sale of the year. Gold prices have rocketed to record heights close to 1,200 dollars an ounce. — AFP photo

GOLDEN TIGER: Japan’s Seibu department store sales clerk displays a pure gold made tiger ornament and 10 gold coins in a wooden box for the New Year lucky bag priced at US$23,100 to celebrate the Year of the Tiger for 2010 during a press preview in Tokyo yesterday. The department store will sell the lucky bag on January 2, 2010, the first sale of the year. Gold prices have rocketed to record heights close to 1,200 dollars an ounce. — AFP photo

The glamorous metal struck US$1,199.49  per ounce at 0905 GMT on the London Bullion Market, after reaching a series of historic peaks in recent days and weeks.

“As ever, another painful week for the US currency saw new highs for gold with the market’s impressive advance stalling only a tick away from US$1,200 per ounce,” said VTB Capital analyst Andrey Kryuchenkov.

He added that most gold traders regarded US$1,200 per ounce as a “done deal”.

In recent weeks, gold has smashed record after record on the back of the weak dollar, inflationary fears and increasing moves by central banks to diversify assets away from the greenback.

The yellow metal, whose two main drivers are jewellery and investment buyers, has also won favour amid the uncertain economic climate and fears of a mounting Dubai debt crisis. Gold is seen by many investors as a safe-haven.

“Gold continues to benefit from an almost ‘perfect storm’ of weak currencies, minimal interest rates, fears about future inflation and fears about financial stability,” added Capital Spreads analyst Simon Denham.

“None of these worries looks like going away any time soon and so the march higher goes on.”

The weaker US currency makes gold cheaper for buyers using stronger currencies, which tends to stimulate demand and lift prices.

Tuesday’s latest record peak beat the previous high of US$1,195.13  that was hit last Thursday after a purchase of IMF gold by Sri Lanka’s central bank. The International Monetary Fund (IMF) had announced it had sold 10 tonnes of gold to Sri Lanka’s central bank for US$375 million  as part of a restructuring of its financial resources.

The record run also came after last week’s newspaper report that India was mulling the purchase of more IMF gold reserves.

“The overall sentiment on gold remains bullish, also spurred by rumours last week that India was ready to buy more IMF gold, according to an article in India’s Financial Chronicle,” Kryuchenkov said. — AFP

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