Gold price rises to new record as it breaks $1,500 an ounce
GOLD advanced to a record, set for a third weekly gain, as a weaker dollar and debt concerns boosted the metal's appeal as an alternative investment. Silver rose to the highest level in 31 years.
Gold for immediate delivery reached an all-time high of $1,512.47 an ounce before trading $1,508.78 in Seoul. The metal is up 1.15pc this week. Futures for June delivery yesterday touched a record $1,509.60 on the Comex in New York.
The most-active contract has posted a record 10 times this month. The exchange was closed yesterday in observance of the Good Friday holiday.
"The weak dollar is having the most influence on gold at the moment," said Chae Un Soo, a Seoul-based trader at Korea Exchange Bank Futures Co.
"The market is getting more jittery, now that we have sovereign-debt concerns about the US in addition to Europe and the Middle East problems, which increasingly boosts safe-haven demand for gold."
The dollar slid to the lowest level since August 2008 against a basket of six major currencies yesterday, on speculation that the Federal Reserve will be slow to raise borrowing costs.
The Dollar Index was little changed yesterday. The Fed has kept the benchmark rate between zero and 0.25pc since December 2008, and pledged to purchase $600bn in Treasuries through June to stimulate the economy.
Standard & Poor's this week revised its debt outlook for the US to negative, from stable. Violence in the Middle East, sovereign-debt turmoil in Europe, and Japan's nuclear crisis have helped propel bullion 31pc higher in the past year.
"Overall, trade for gold and other precious metals was extremely thin, due to the market holiday in the US and UK," said Hiroyuki Kikukawa, general manager of research at IDO Securities in Tokyo.
Silver for immediate delivery climbed as much as 0.6pc to $46.86 an ounce, the highest price since 1980.
The metal has climbed 9pc this week. That was the biggest weekly gain since February 18. Spot palladium fell 0.7pc to $765 an ounce, while cash platinum was 0.5pc higher, at $1,825 an ounce.