Thread: Gold marks 28-year peak, sights on $800

http://www.businessday.co.za/article...?ID=BD4A588573

LONDON - Gold hit a 28-year high today, underpinned by record-high oil prices and geo-political tension that raised the precious metal’s profile.

Prices later slipped as profit-taking set in, with the dollar’s slight gains versus the euro making bullion dearer for holders of other currencies.

But having surged past $760 an ounce, some dealers have said the market is well positioned in coming sessions to close in on the $800 mark last seen in 1980 when bullion hit a record $850.

Support was seen coming from further dollar weakness and strength in crude prices that would highlight gold as a hedge against oil-led inflation.

"Anything is possible. We’ve certainly broken out and we’re sort of in uncharted waters as we haven’t been here in so long," said David Holmes, director of precious metals sales at Dresdner Kleinwort. "The big theme of the market is that it’s been very difficult to predict the high and everybody is being cautious as they know the market is long, but the momentum is still upwards," he said.

In late afternoon, spot gold was trading at $756,65/757,35 per troy ounce, against $758,20/759,00 late in New York yesterday, having hit a 28-year peak at $766,60 earlier.

Oil thundered towards $88 a barrel, hitting a new record and extending a rally that has added $8 in a week on tight supplies, strong demand and tension in northern Iraq.

Both oil and gold were also drawing support from tension in northern Iraq. The Turkish cabinet asked parliament yesterday for permission to launch an attack.

In other bullion markets, benchmark Tocom gold futures closed up ¥25 or 0,9% at the day’s peak at ¥2,907 a gram, the highest since October 1984. US Comex gold futures eased, with the most active December contract down $0,8 an ounce at $761,40.

Some analysts injected a note of caution into the uptrend on gold, saying speculative positioning on the Comex futures market had reached extreme levels.

On Friday, the Comex gold futures contract set a record in open interest levels for a fifth straight day.

UBS head of metals strategy John Reade said some markets were exhibiting a diminished appetite for risk, with the low-yielding Japanese yen rallying as investors unwound carry trades - where they borrow low-yielding currencies to fund investment in higher return assets.

"If risk aversion is about to return, yen strength (as a result of FX carry-trade unwinds) and possibly USD strength could quickly knock the wind out of gold’s sails," he said.

The US dollar extended declines versus the Japanese yen and pared gains versus the euro after a report showed an outflow of funds from the US in August.

"We believe gold prices remain driven by the lasting dollar weakness, gold’s role of a safe haven in times of crisis and inflation fears," Commerzbank said in a research note.

In other metals, platinum pulled back from a record high of $1,428 yesterday as the market gave way to profit-taking. Spot price fell to $1,408/1,412 an ounce from $1,421/1,425 in New York, with good two-way interest seen during early trade.

Analysts said they were still confident of the market reaching record highs again as investors kept an eye on bullish sentiment on gold and supply worries in SA. Palladium fell to $368/372 an ounce from $378/382, while silver eased to $13,63/13,68 from $13,77/13,82.

thank you george bush

^^It's what I do all day.

The market of gold futures is so unpredictable right now. But with the busy Christmas season ahead it's a 99% sure fire way to make a good investment and put some extra $$ in your pocket.