Gold climbs to record for fifth day
Published 22/09/2010 | 10:30
Gold climbed to a record for a fifth day after the Federal Reserve said it was willing to ease monetary policy further to boost the US economy, triggering a slump in the dollar. Silver jumped to a 30-month high.
Bullion for immediate delivery advanced as much as 0.5pc to $1,293.35 an ounce, before trading at $1,289.75 at 3:45pm in Singapore.
Gold, which often moves counter to the dollar, has advanced about 18pc this year and is heading for its 10th annual gain.
“Key drivers will continue to be safe-haven demand from an uncertain European and US economic backdrop and the emergence of stronger gold investment demand in China,” Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd in Melbourne, wrote in a report today.
The US central bank will continue to monitor the economic outlook and is “prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate,” the Federal Open Market Committee said yesterday in a statement.
Gold for December delivery on the Comex in New York gained as much as 1.7pc to an all-time high of $1,295.80 an ounce before trading at $1,290.70.
The US currency extended a decline against a basket of six major counterparts, dropping to the lowest level in six weeks. The dollar last traded at $1.3315 per euro.
Australia & New Zealand Banking Group raised its 2011 gold forecast by 6pc to $1,347 an ounce, and silver target by 8pc to $21.50 an ounce.
The World Gold Council forecast in March that gold consumption in China may double within 10 years.
The National Bureau of Economic Research said September 20 that the worst US recession since the 1930s ended in June 2009.
Still, unemployment in the US may stay above pre-recession levels until at least 2013, the Organisation for Economic Cooperation and Development said in a report the same day.
The Fed has kept its benchmark interest rate at zero percent to 0.25pc and purchased mortgage-backed securities and Treasuries to help bolster the economy.
Silver for immediate delivery advanced to $21.1087 an ounce, the highest level since March 2008, before trading at $21.0375.
“Silver is also benefiting from increased safe-haven demand,” Pervan wrote.
Platinum climbed as much as 0.6pc to $1,634.05 an ounce, the highest price since May 19, and palladium increased as much as 1.5pc to $543 an ounce.