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Gold near 23-year high
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December 02, 2005
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Gold held near 23-year highs on Monday after another round of fund buying spurred by worries over inflation and by a strong appetite for commodity investments.
Despite some prospect of fund liquidation, runaway gold prices boosted other precious metals, with platinum at a near-26-year high, while silver hit an 18-year peak.
Gold climbed to $509.20 in February 1983. Anything above that level would take the metal to its highest since January 1980, when it hit a record $850.
Many participants said gold might attract profit-taking once it had crossed $500 -- a level it has attained and briefly held only twice in the past three decades.
"I would suggest the market is just catching its breath at the moment," he said. "There are very good reasons for what is happening and there is concerted buying by investors out there."
Healthy demand, stagnating supply, a recent dearth of forward selling by gold miners and more orderly sales from central banks have all aided the rally.
But momentum has really built up since 2004, when commodities became an attractive target for investors' cash as this relatively forgotten asset class outperformed more traditional sectors such as stocks and bonds.
Speculators have bought spot gold and futures, specialist investment products and shares in mining firms, which has made a big impact on prices due to the relatively small size of commodities compared with other asset classes.
Other precious metals followed gold's lead.
Platinum was at $999/1,003 an ounce from $1,000/1,005 late in New York. In early trade platinum rose to $1,006, the highest since March 1980.
Palladium was at a 19-month high of $270/274 an ounce, up from $264/268.
Silver was unchanged at $8.54/8.57, but off an earlier peak of $8.64, the highest since August 1987.
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Source:
Reuters
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