Gold rises to record as investors seek alternative to currency
Gold climbed to records in New York and London on demand for an alternative investment to currencies. Silver advanced to a 30-year high.
Gold rallied as the dollar fell to a three-week low against the yen and weakened against most other major counterparts after US President Barack Obama said he would agree to sustain tax cuts.
Gold traded in Japanese yen rose to the highest price since 1983. Precious metals gained this year as Europe’s debts weakened paper money.
“With all the concern going on about the US, and all the debt issues in Europe, there’s no currency that anybody really wants to hold,” said Connor Noonan, an analyst at Castlestone Management Ltd in London.
“What we used to see in this kind of situation was safe-haven buying in dollars and now that’s turning into safe-haven buying of gold.”
Gold for delivery in February jumped to the all-time high of $1,432.50 an ounce and was up $14.50, or 1pc, at $1,430.60 by 8:36am on the Comex in New York, the seventh consecutive gain.
Spot gold climbed $4.65, or 0.3pc, to $1,428.40 an ounce, after earlier today touching $1,431.25.
The metal in the morning “fixing,” the price used by some mining companies to sell production, climbed to $1,426 an ounce, the most since at least 1984, from $1,415.25 an ounce at yesterday afternoon’s fixing, according to data on Bloomberg.
Assets of gold in exchange-traded products rose 0.75 metric ton to 2,099.15 tons yesterday as prices climbed to an all-time high, according to data compiled by Bloomberg from 10 providers.
Gold futures have jumped 30pc this year after governments spent trillions of dollars and kept interest rates low to bolster economies after the worst global recession since World War II.
“The market is all about the European debt crisis and a third round of quantitative easing in the US,” said Wallace Ng, executive director of commodities at ABN Amro Bank in Hong Kong.
“Gold is now driven by investment demand” and purchases from jewelers and physical users particularly from India have been muted, he said.
Ng forecast investors would sell the metal at near-record levels, and pegged gold’s support for the week at $1,400.
Silver for delivery in March advanced 91.5 cents, or 3.1pc, to $30.65 an ounce. The futures earlier today rose to $30.75, the highest price for a most-active contract since March 12, 1980.
Palladium for March delivery increased $20.90, or 2.8pc, to $772.30 an ounce and platinum for January delivery rose $16.60, or 1pc, to $1,730.20 an ounce. Both metals trade on the New York Mercantile Exchange in New York.