LONDON – Gold surged to a record high just under US$900 an ounce on Wednesday, powered by heavy buying by investment funds and helped by rising oil prices and a strong debut for Shanghai gold futures.
Platinum also set a lifetime high on positive fundamentals and tracking gold’s rally. Silver touched two-month highs and was not far from its highest level in 27 years.Spot gold jumped to US$891.40 an ounce, surpassing the previous record of US$881.10 reached on Tuesday.It was quoted at US$883.60/884.40 at 12h41 GMT, compared with US$878.10/878.90 in New York late on Tuesday.”This is an extension of the ongoing rally with very strong underlying interest in buying gold across geographic locations,” said David Holmes, director of precious metals sales at Dresdner Kleinwort Investment bank.”I perceive that it’s possible for gold to continue making new highs.US$900 is clearly within reach and given its recent momentum it may continue making progress towards the psychologically-important US$1000 level,” he said.The market gained momentum after the key Japanese gold futures price hit its highest level since March 1984 and gold futures were launched on the Shanghai exchange.The contract surged to nearly US$1000 an ounce on Wednesday, as enthusiastic new bullion bulls bid a hefty premium over their global peers.”The launch of the Shanghai gold futures contract seems likely to be the trigger for gold to hit our one-month target of US$900/oz, probably before the end of the week,” UBS Investment Bank said in a daily client note.”While we continue to consider the air to be thin at these levels and that gold is vulnerable to a sharp sell-off should investor sentiment reverse, there is a chance that developments in Shanghai could lead to much greater near-term gains.”In other bullion markets, US gold futures rose in line with the spot price.The most active February contract was up US$7 from New York at US$887.30.The key gold futures contract for December 2008 delivery on the Tokyo Commodity Exchange (TOCOM) finished at 3,134 yen a gram, up 37 yen or 1.2 per cent from Tuesday.”It looks like the gold market wants to see and test the US$900 level.I could imagine that there will be some long liquidation by then at the latest,” said Alexander Zumpfe, a metals trader at Germany’s Heraeus.”Overall, the environment for the metal should continue to be supportive as long as economic worries persist and oil maintains its bullish tone.”Spot gold rose more than 30 per cent in 2007, its biggest annual gain since 1979.Investors were also convinced to buy gold due to lingering tensions in the Middle East, rising oil and dollar weakness.Oil rose above US$97 a barrel as further declines in US crude stocks and the potential for more disruptions to Nigerian supply offset concerns over the US economy.Platinum rose as high as US$1560 an ounce and was last quoted at US$1559/1564, versus US$1547/US$1552 late in New York.Palladium was flat at US$376/379 an ounce, while silver rose to US$16.14 an ounce before falling to US$15.92/15.97, against US$15.70/15.75 in New York.Nampa-ReutersSilver touched two-month highs and was not far from its highest level in 27 years.Spot gold jumped to US$891.40 an ounce, surpassing the previous record of US$881.10 reached on Tuesday.It was quoted at US$883.60/884.40 at 12h41 GMT, compared with US$878.10/878.90 in New York late on Tuesday.”This is an extension of the ongoing rally with very strong underlying interest in buying gold across geographic locations,” said David Holmes, director of precious metals sales at Dresdner Kleinwort Investment bank.”I perceive that it’s possible for gold to continue making new highs.US$900 is clearly within reach and given its recent momentum it may continue making progress towards the psychologically-important US$1000 level,” he said.The market gained momentum after the key Japanese gold futures price hit its highest level since March 1984 and gold futures were launched on the Shanghai exchange.The contract surged to nearly US$1000 an ounce on Wednesday, as enthusiastic new bullion bulls bid a hefty premium over their global peers.”The launch of the Shanghai gold futures contract seems likely to be the trigger for gold to hit our one-month target of US$900/oz, probably before the end of the week,” UBS Investment Bank said in a daily client note.”While we continue to consider the air to be thin at these levels and that gold is vulnerable to a sharp sell-off should investor sentiment reverse, there is a chance that developments in Shanghai could lead to much greater near-term gains.”In other bullion markets, US gold futures rose in line with the spot price.The most active February contract was up US$7 from New York at US$887.30.The key gold futures contract for December 2008 delivery on the Tokyo Commodity Exchange (TOCOM) finished at 3,134 yen a gram, up 37 yen or 1.2 per cent from Tuesday.”It looks like the gold market wants to see and test the US$900 level.I could imagine that there will be some long liquidation by then at the latest,” said Alexander Zumpfe, a metals trader at Germany’s Heraeus.”Overall, the environment for the metal should continue to be supportive as long as economic worries persist and oil maintains its bullish tone.”Spot gold rose more than 30 per cent in 2007, its biggest annual gain since 1979.Investors were also convinced to buy gold due to lingering tensions in the Middle East, rising oil and dollar weakness.Oil rose above US$97 a barrel as further declines in US crude stocks and the potential for more disruptions to Nigerian supply offset concerns over the US economy.Platinum rose as high as US$1560 an ounce and was last quoted at US$1559/1564, versus US$1547/US$1552 late in New York.Palladium was flat at US$376/379 an ounce, while silver rose to US$16.14 an ounce before falling to US$15.92/15.97, against US$15.70/15.75 in New York.Nampa-Reuters
