Gold above $900/oz, hits new euro, sterling highs
Arizona Coin Collector
http://uk.reuters.com/article/hotStocksNewsUS/idUKTRE50P2RX20090126
Gold above $900/oz, hits new euro, sterling highs
Mon Jan 26, 2009 12:54pm GMT
By Jan Harvey
LONDON (Reuters) - Gold climbed above $900 an ounce
to reach its highest level in more than three months
in Europe on Monday, as interest in bullion as a
haven from risk spurred buying.
Spot gold was at $908.30/910.30 an ounce at 6:54
a.m. EST, its highest since Oct 10, and up from
$898.10 in New York late on Friday.
Gold priced in euros reached a new all-time high of
700.54 an ounce, and in sterling of 661.55 pounds,
as fears over the global economic slowdown and
volatility in other asset prices spurred buying.
RBS Global Banking & Markets' head of commodity
strategy Nick Moore said factors including falling
interest rates, the "reinflation" of Western
economies and prospect of lower supply both from
mines and via central bank sales were supporting gold.
"There is an insatiable thirst for gold at the
moment," he said.
The dollar, whose strength usually weighs on gold,
climbed to a six-week high against the euro on
Monday, as investors worried about the outlook for
the banking sector.
However, other factors outweighed the dollar-euro
exchange rate to support the precious metal.
Demand for physical gold both from investors in
smaller products such as coins and bars and from
exchange-traded funds remains firm.
Investors were seeking the safety of physical
bullion as other asset prices met fresh volatility,
analysts said.
"In times of economic crisis, falling equity markets
and mounting aversion to risk, physical gold is
preferred as the safest form of investment,"
Commerzbank analyst Eugen Weinberg said.
The world's largest gold-backed ETF, New York's
SPDR Gold Trust, which issues securities backed by
physical stocks of the precious metal, said its
holdings rose 1.6 percent to an all-time high of
832.57 tons on Friday.
The trust's bullion holdings have climbed more
than 52 tons or nearly 7 percent since the
beginning of the year.
ASIA
Japan's biggest bullion house Tanaka Kikinzoku said
its gold coin sales more than doubled in 2008 as
the global financial crisis unfolded.
Asian precious metals trading is likely to be
muted by the closure of the Shanghai Gold Exchange
on Monday due to the Lunar New Year holiday.
On the supply side, AIM-listed gold miner Peter
Hambro Mining (POG.L) said its 2008 attributable
gold production was up 36 percent at 393,600
ounces, and that it expects its 2009 production
to be 460,000-510,000 ounces.
Among other precious metals, silver rose in line
with gold to $12.09/12.17 an ounce from $11.92.
Platinum firmed to $969/974 an ounce from $955.50
an ounce in New York late on Friday.
"We would not be surprised to see the gap between
platinum and gold narrow: the ratio stands at
about 1.07 at the time of writing and we have a
standing recommendation to buy the platinum gold
spread when the ratio falls below 1.05," UBS
strategist John Reade said in a daily note.
"We believe that in the long term platinum should
trade at a considerable premium to gold and we
observe that periods of platinum's discount to
gold tend to be measured in days or weeks rather
than months and years," he added.
Palladium eased to $194/199 an ounce from $195.00.
(Editing by James Jukwey)
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