Gold climbs to over $1,360
Published 13/10/2010 | 12:36
Gold rose above $1,360 an ounce, approaching last week’s record, on speculation more investors will buy precious metals as an alternative to currencies.
Increased investor demand in Europe helped push holdings in ETF Securities Ltd’s gold funds to nearly 8.9 million ounces yesterday, the most since July 20, according to data compiled by Bloomberg.
Investors kept buying more gold with prices near an all-time high as Goldman Sachs Group, UniCredit and Citigroup raised their forecasts. The dollar today declined 0.4pc against the euro, after falling 7pc in September.
“All is set for a new record price in gold,” said Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland. “This momentum higher will attract investors to participate in the next move up.”
Gold for immediate delivery climbed $9, or 0.7pc, to $1,359.35 an ounce by 10:44am in London after earlier today rising to $1,360.05 an ounce.
That’s the highest price since the record $1,364.77 an ounce on October 7.
Futures for December delivery added 0.9pc to $1,359.10 an ounce on the Comex in New York.
In Shanghai, the futures for December delivery traded at an all-time high of 293.2 yuan a gram ($1,367 an ounce).
Goldman Sachs said gold will benefit from so-called quantitative easing as the US Federal Reserve tries to boost growth. It forecast $1,650 an ounce in 12 months.
UniCredit analyst Jochen Hitzfeld in Munich raised his target for next year to $1,500 an ounce. Citigroup’s “short and medium term” forecast for gold is $1,450 an ounce.
If the Fed buys $500bn of government securities, that would lead to lower interest rates, and be negative for the dollar and positive for gold, Dincer said.
Silver for immediate delivery jumped 0.9pc to $23.535 an ounce, and platinum gained 0.9pc to $1,697.50 an ounce. Palladium for immediate delivery jumped $9.35, or 1.6pc, to $592.85 an ounce.