Gold hit another 28-year peak as the dollar plunged to
new record lows against the euro, while oil prices
remained close to new record highs set earlier this
morning.
LONDON (Thomson Financial) - 10/26/2007
At 2.27 pm, spot gold was up at 777.70 usd an ounce against 767.60 usd in late
New York trades yesterday, having just hit 778.70 usd, its highest level point
since January 1980.
The dollar hit a series of record lows against the euro today as a recent batch
of weak US economic data fuelled speculation the Fed will cut rates again at
its meeting next week.
A weak dollar tends to benefit gold by making it cheaper for holders of other
currencies. It also boosts oil prices by making them relatively cheaper for the
same reason.
High oil prices in turn benefit gold as the metal is seen as a hedge against
oil-led inflation and as a safe haven asset that holds its value in times of
geopolitical or economic turmoil.
"As the drumbeat of war grew louder since yesterday, gold prices followed in
lockstep with record oil prices and new lows set by the US dollar against the
euro," said Kitco analyst Jon Nadler.
"When it comes to warfare (possible or actual), the price premia exhibited by
gold can be counted on quite reliably."
The US has announced new sanctions against Iran, including designating the
international arm of the Revolutionary Guards, the Quds Force, a supporter of
terrorism.
The sanctions are also targeting Iranian state-owned banks, companies,
individuals and the defence ministry.
Nadler said the gold market is focused "not only the set of harsh US sanctions
against Iran but Tehran's sharply defiant response to the imposition of same".
At the same time, participants are monitoring simmering tensions between
Turkey and Kurdish rebels in northern Iraq, with Turkish forces saying they
recently repelled a guerrilla attack near the Iraqi border.
The forces are amassed on the Turkey-Iraq border, with the government
having last week passed a bill authorising the military to enter northern Iraq
to flush out bases of the Kurdish PKK rebels.
"Most observers have little doubt that crude oil supplies would encounter
some form of disruption were some direct conflict in the region take the place
of sabre-rattling," said Nadler.
Gold has hit a series of fresh 28-year highs for more than a month now.
Analysts say while the speed of its ascent means there is a risk of a near-term
pull back in prices, the metal remains set to test the 800 usd level longer term.
"We continue to be bullish the precious metals and... have increased our 2008
calendar year average forecast to an average of 814 usd an ounce," said JP
Morgan analyst Michael Jansen.
Elsewhere, platinum was up at 1,452 usd against 1,443 usd, near last week's
fresh all-time high of 1,457.50 usd an ounce.
Platinum has been underpinned in recent weeks by mine closures in South
Africa, the world's largest platinum producer. One of two shafts at Impala
Platinum's Marula mine remain closed following a fatal accident.
The Marula mine produced 65,200 ounces in the year to June 2007 and
Impala said the closed shaft produced half of the mines 6,000 ounces of
platinum per month.
"Despite the lost output being nominal, the platinum market is estimated to
have swung heavily back into deficit this year and stocks have remained very
low. Thus even the minor disruptions have buoyed platinum prices," said
analysts at Barclays Capital.
Elsewhere, silver was up at 14.08 usd an ounce against 13.86 usd in
mid-morning trades, having earlier hit an 8-month high of 14.12 usd, while
palladium rose to 366 usd against 364 usd.
new record lows against the euro, while oil prices
remained close to new record highs set earlier this
morning.
LONDON (Thomson Financial) - 10/26/2007
At 2.27 pm, spot gold was up at 777.70 usd an ounce against 767.60 usd in late
New York trades yesterday, having just hit 778.70 usd, its highest level point
since January 1980.
The dollar hit a series of record lows against the euro today as a recent batch
of weak US economic data fuelled speculation the Fed will cut rates again at
its meeting next week.
A weak dollar tends to benefit gold by making it cheaper for holders of other
currencies. It also boosts oil prices by making them relatively cheaper for the
same reason.
High oil prices in turn benefit gold as the metal is seen as a hedge against
oil-led inflation and as a safe haven asset that holds its value in times of
geopolitical or economic turmoil.
"As the drumbeat of war grew louder since yesterday, gold prices followed in
lockstep with record oil prices and new lows set by the US dollar against the
euro," said Kitco analyst Jon Nadler.
"When it comes to warfare (possible or actual), the price premia exhibited by
gold can be counted on quite reliably."
The US has announced new sanctions against Iran, including designating the
international arm of the Revolutionary Guards, the Quds Force, a supporter of
terrorism.
The sanctions are also targeting Iranian state-owned banks, companies,
individuals and the defence ministry.
Nadler said the gold market is focused "not only the set of harsh US sanctions
against Iran but Tehran's sharply defiant response to the imposition of same".
At the same time, participants are monitoring simmering tensions between
Turkey and Kurdish rebels in northern Iraq, with Turkish forces saying they
recently repelled a guerrilla attack near the Iraqi border.
The forces are amassed on the Turkey-Iraq border, with the government
having last week passed a bill authorising the military to enter northern Iraq
to flush out bases of the Kurdish PKK rebels.
"Most observers have little doubt that crude oil supplies would encounter
some form of disruption were some direct conflict in the region take the place
of sabre-rattling," said Nadler.
Gold has hit a series of fresh 28-year highs for more than a month now.
Analysts say while the speed of its ascent means there is a risk of a near-term
pull back in prices, the metal remains set to test the 800 usd level longer term.
"We continue to be bullish the precious metals and... have increased our 2008
calendar year average forecast to an average of 814 usd an ounce," said JP
Morgan analyst Michael Jansen.
Elsewhere, platinum was up at 1,452 usd against 1,443 usd, near last week's
fresh all-time high of 1,457.50 usd an ounce.
Platinum has been underpinned in recent weeks by mine closures in South
Africa, the world's largest platinum producer. One of two shafts at Impala
Platinum's Marula mine remain closed following a fatal accident.
The Marula mine produced 65,200 ounces in the year to June 2007 and
Impala said the closed shaft produced half of the mines 6,000 ounces of
platinum per month.
"Despite the lost output being nominal, the platinum market is estimated to
have swung heavily back into deficit this year and stocks have remained very
low. Thus even the minor disruptions have buoyed platinum prices," said
analysts at Barclays Capital.
Elsewhere, silver was up at 14.08 usd an ounce against 13.86 usd in
mid-morning trades, having earlier hit an 8-month high of 14.12 usd, while
palladium rose to 366 usd against 364 usd.
| Gammill Numismatics presents "The GN Newsletter" Current Events and Collector News |
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