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Gold Nears Record High on Weak Dollar, Oil Jump - ASHARQ AL-AWSAT English Archive
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SINGAPORE (Reuters) – Gold extended gains on Thursday, moving closer to its recent record, as speculative buying accelerated after the U.S. dollar sank against other currencies and oil hit an all-time high above $110 a barrel.

Gold rose to $988.60/989.40 an ounce from $981.90/982.70 late in New York, partly driven by early buying from Japanese speculators. Gold was within sight of a record high of $991.90 hit on March 6.

“I would expect the market to keep an eye on the weak dollar and high oil prices. That gives the real support for gold,” said Louis Lok, a dealer at Bank of China in Hong Kong, referring to a rebound from recent lows around $964 an ounce.

“I’d expect to see the support level at $975. We will test again the high level of $994 or $995.”

Other precious metals firmed but held below their recent highs.

Gold has gone up as much as 19 percent in 2008, on top of a 32 percent rise last year, on fears of the inflationary impact of rising energy costs and expectations of further interest rate cuts in the United States, which elevate the metal’s appeal as an alternative investment.

Dealers pegged gold’s upside target at $1,000 an ounce but a lack of buying from jewellers could cap gains. Resistance was at $995 an ounce.

Jewellers were on the sidelines, but dealers in Japan saw purchases from the electronics sector. Gold-plated connectors are an integral part of plugs and sockets, and the metal is also used in wiring to connect parts of semiconductors such as transistors.

“I don’t see strong selling interest from the general public because people think the price will go up to $1,000 anyway. But physical demand from the industrial is quite steady,” said a dealer in Tokyo.

Gold bars were quoted at a discount of 25 U.S. cents an ounce to the spot London price in Tokyo, unchanged from last week.

The dollar broke below 100 yen for the first time in 12 years on Thursday. It fell as low as 99.80 yen according to Reuters data, down 1.6 percent on the day and testing levels last seen in late 1995.

Crude oil held near a record on Thursday as the dollar’s weakness outweighed increases in U.S. crude inventories.

Spot platinum rose to $2,090/2,100 an ounce from $2,060/2,070 an ounce in New York.

The benchmark platinum futures contract for February delivery on the Tokyo Commodity Exchange ended 77 yen per gram higher at 6,568 yen but off the intraday high of 6,632 yen.

In industry news, No. 2 gold producer Newmont Mining Corp said global gold mine output willdecline over the next decade or so because of production constraints and past underinvestment in finding new resources.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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