Gold Rallies to 18-Month High on Dollar’s Weakness, Inflation
September 8th, 2009Via: Bloomberg:
Gold rose to the highest price since March 2008, passing $1,000 an ounce, while silver climbed to a 13-month high as a weaker dollar and concern that inflation may accelerate boosted the appeal of precious metals.
Bullion for immediate delivery surged to $1,007.70 in London, taking this year’s increase to 14 percent. Gold, which reached a record $1,032.70 in March 2008, is set for a ninth yearly gain. Crude-oil futures and all six industrial metals on the London Metal Exchange rallied as the Dollar Index lost as much as 0.8 percent. Raw materials typically move inversely to the U.S. currency.
Governments have cut interest rates and boosted spending to fight the worst recession since World War II, spurring investors to buy bullion as a hedge against potential inflation and debasement of currencies. Gold, silver and palladium holdings in exchange-traded funds have advanced to records.
“We don’t see any immediate recovery in the dollar and gold is one of the better alternatives,” said Bernard Sin, head of currency and metals trading at bullion refiner MKS Finance SA in Geneva. “From here, the next technical level is $1,040, and at the rate it’s going it might not be difficult. There’s a lot of new money coming into gold.”
Gold last traded at more than $1,000 on Feb. 20, the first time the metal had reached that price since March 2008. Spot prices then retreated as low as $864.97 on April 17. The metal added 0.9 percent to $1,004.31 at 10:05 a.m. in London. Bullion for December delivery surged as high as $1,009.40 on the Comex division of the New York Mercantile Exchange and was last at $1,005.90.
