Gold price targets new highs

SINGAPORE – Gold gained yesterday and hovered near a 28-year high after a weak US dollar spurred buying from investors and speculators, who believed the price could rise further as fundamentals supported the metal.

The physical sector saw jewellers selling gold scrap to Singapore, a centre for bullion trading in Southeast Asia, but dealers also noted early buying from investors as crude oil hovered near record highs Spot gold rose to US$734,70/735,50 an ounce from US$731,60/732,40 late in New York. Gold rallied to its highest since January 1980 of US$739 on Friday on technical buying and short-covering amid inflation fears and a falling dollar.The most-active December gold contract on the COMEX division of the New York Mercantile Exchange rose US$3,5 to US$742,4 an ounce on electronic trade, after hitting another 28-year high at US$747,1 an ounce last week.”We have noted net long positioning on COMEX and net inflows in ETFs, and with the dollar so out of favour, we believe that the gold price may well breach our three-month trading target of US$750 an ounce,” UBS analyst Glyn Lawcock in Sydney said in a report.Gold remained one of the “most significant real assets,” typically acting as a safe-haven investment during economic downturns, he said.Record-high oil prices, the Federal Reserve’s surprise move to slash interest rates by 50 basis points and a record-low dollar against the euro have elevated gold’s safe-haven appeal, helping it move away from a seven-week low of US$641,10 hit in August.Gold has risen as much as US$102,2 since the start of 2007.”I’ve seen fund buying and my guess is that US funds are pushing up the market today,” said a dealer in Singapore.”People still think the upward trend is intact after the market closed above US$730 in New York.We may try the higher levels although I think there will be resistance at US$745 and US$750,” he said.Gold spiked to a record high of of US$850 in January 1980 when investors bought the metal heavily on high inflation linked to strong oil prices, Soviet intervention in Afghanistan and the impact of the Iranian revolution.Japanese financial markets are closed on Monday for a public holiday.The benchmark August 2008 gold futures on the Tokyo Commodity Exchange ended 27 yen per gram higher at 2 746 yen on Friday.”Thailand is still selling scrap but the Indonesians have slowed down a bit.I’ve seen early buying although US$735 seems to be attracting some profit taking as well,” said a physical dealer in Singapore, referring to gold’s intraday high of US$735,90.Platinum rose to US$1 330/1 335 an ounce from US$1 326,80/1 333,80 late in New York.Palladium rose to US$338/343 an ounce from US$335/339 late in New York.Silver inched up to US$13,56/13,60 an ounce from US$13,48/13,53 an ounce.Nampa-ReutersGold rallied to its highest since January 1980 of US$739 on Friday on technical buying and short-covering amid inflation fears and a falling dollar.The most-active December gold contract on the COMEX division of the New York Mercantile Exchange rose US$3,5 to US$742,4 an ounce on electronic trade, after hitting another 28-year high at US$747,1 an ounce last week.”We have noted net long positioning on COMEX and net inflows in ETFs, and with the dollar so out of favour, we believe that the gold price may well breach our three-month trading target of US$750 an ounce,” UBS analyst Glyn Lawcock in Sydney said in a report.Gold remained one of the “most significant real assets,” typically acting as a safe-haven investment during economic downturns, he said.Record-high oil prices, the Federal Reserve’s surprise move to slash interest rates by 50 basis points and a record-low dollar against the euro have elevated gold’s safe-haven appeal, helping it move away from a seven-week low of US$641,10 hit in August.Gold has risen as much as US$102,2 since the start of 2007.”I’ve seen fund buying and my guess is that US funds are pushing up the market today,” said a dealer in Singapore.”People still think the upward trend is intact after the market closed above US$730 in New York.We may try the higher levels although I think there will be resistance at US$745 and US$750,” he said.Gold spiked to a record high of of US$850 in January 1980 when investors bought the metal heavily on high inflation linked to strong oil prices, Soviet intervention in Afghanistan and the impact of the Iranian revolution.Japanese financial markets are closed on Monday for a public holiday.The benchmark August 2008 gold futures on the Tokyo Commodity Exchange ended 27 yen per gram higher at 2 746 yen on Friday.”Thailand is still selling scrap but the Indonesians have slowed down a bit.I’ve seen early buying although US$735 seems to be attracting some profit taking as well,” said a physical dealer in Singapore, referring to gold’s intraday high of US$735,90.Platinum rose to US$1 330/1 335 an ounce from US$1 326,80/1 333,80 late in New York.Palladium rose to US$338/343 an ounce from US$335/339 late in New York.Silver inched up to US$13,56/13,60 an ounce from US$13,48/13,53 an ounce.Nampa-Reuters