Gold rallies to record high

SINGAPORE – Gold rallied to its highest in nearly three decades yesterday after crude oil jumped more than a dollar on supply concerns, and dealers said worries in the US credit market will also ignite safe-haven buying in coming days.

Silver hit its best level in almost 18 months to track gold’s strength. High prices sparked sales of gold scrap from Indonesia and Thailand to Singapore, a centre for bullion trading in Southeast Asia, but dealers also noted speculative buying.Spot gold hit an intraday high of US$814,10 an ounce, its best level since January 1980, before slipping to US$813,50/814,25 an ounce, higher than US$808,80/809,60 late in New York.Gold extended a rally on Monday, when safe-haven buying gained pace due to falls in equities markets amid fears that the credit crisis stemming from the sub-prime mortgage problem could wreak havoc at US banks.”Although charts are in an overbought territory, the momentum indicators are currently too strong at the moment to call it a top.Immediate resistance is around US$812 and US$820,” said Pradeep Unni, an analyst at Vision Commodities in Dubai.US crude rose US$1,22 to US$95,20 a barrel, moving towards the record high of US$96,24 hit last week as Asian stock markets steadied and dealers expected US oil inventories to fall ahead of winter Gold is riding high on a struggling dollar after the Federal Reserve cut interest rates, record-high crude, Turkey’s threat of an incursion into Iraq to deal with Kurdish rebels and recently, fears that the US sub-prime mortgage crisis was worsening.The benchmark contract in Tokyo gold futures rose above the closely watched 3 000 yen per gram level for the first time since July 1984.The October contract on the Tokyo Commodity Exchange ended 30 yen higher at 3,015 yen.Most Asian stocks bounced as investors bought back some financial stocks following the recent drubbing fuelled by credit fears after Citigroup, the biggest US bank by total assets, said it could suffer an US$11 billion write-down related to sub-prime mortgage losses.Tokyo’s Nikkei average ended at a seven-week closing low, while MSCI’s measure of other Asia Pacific stocks rose 0,89 per cent.”The price of gold is being fuelled by a declining interest rate environment and also injection of excess liquidity,” said William Kwan, a dealer in Singapore.Physical buyers such as jewellery makers may wait for gold to fall below US$800 before buying again but the metal’s strong fundamentals could also trigger demand from speculators and investors, he said.The most active December contract on COMEX added US$3,0 an ounce to US$813,8.Gold was also supported by supply concerns after a spate of deaths in South Africa’s mines set the 300 000-strong National Union of Mineworkers and mining firms on a collision course.Gold hit an all-time high of US$850 in January 1980.Nampa-ReutersHigh prices sparked sales of gold scrap from Indonesia and Thailand to Singapore, a centre for bullion trading in Southeast Asia, but dealers also noted speculative buying.Spot gold hit an intraday high of US$814,10 an ounce, its best level since January 1980, before slipping to US$813,50/814,25 an ounce, higher than US$808,80/809,60 late in New York.Gold extended a rally on Monday, when safe-haven buying gained pace due to falls in equities markets amid fears that the credit crisis stemming from the sub-prime mortgage problem could wreak havoc at US banks.”Although charts are in an overbought territory, the momentum indicators are currently too strong at the moment to call it a top.Immediate resistance is around US$812 and US$820,” said Pradeep Unni, an analyst at Vision Commodities in Dubai.US crude rose US$1,22 to US$95,20 a barrel, moving towards the record high of US$96,24 hit last week as Asian stock markets steadied and dealers expected US oil inventories to fall ahead of winter Gold is riding high on a struggling dollar after the Federal Reserve cut interest rates, record-high crude, Turkey’s threat of an incursion into Iraq to deal with Kurdish rebels and recently, fears that the US sub-prime mortgage crisis was worsening.The benchmark contract in Tokyo gold futures rose above the closely watched 3 000 yen per gram level for the first time since July 1984.The October contract on the Tokyo Commodity Exchange ended 30 yen higher at 3,015 yen.Most Asian stocks bounced as investors bought back some financial stocks following the recent drubbing fuelled by credit fears after Citigroup, the biggest US bank by total assets, said it could suffer an US$11 billion write-down related to sub-prime mortgage losses.Tokyo’s Nikkei average ended at a seven-week closing low, while MSCI’s measure of other Asia Pacific stocks rose 0,89 per cent.”The price of gold is being fuelled by a declining interest rate environment and also injection of excess liquidity,” said William Kwan, a dealer in Singapore.Physical buyers such as jewellery makers may wait for gold to fall below US$800 before buying again but the metal’s strong fundamentals could also trigger demand from speculators and investors, he said.The most active December contract on COMEX added US$3,0 an ounce to US$813,8.Gold was also supported by supply concerns after a spate of deaths in South Africa’s mines set the 300 000-strong National Union of Mineworkers and mining firms on a collision course.Gold hit an all-time high of US$850 in January 1980.Nampa-Reuters