GOLD RACES TO RECORD HIGH NEAR $915 ON WEAK DOLLAR -- JANUARY 14, 2008
LONDON, Jan. 14, 2008 (Thomson Financial delivered by Newstex) -- Gold raced to a series of fresh records above $ 910 USD per ounce as economic uncertainty fueled investment and as the dollar remained weak.
The precious metal, which has gained around 60 pct since this time last year, rose to a record $914.10 USD per ounce this morning.
Dollar weakness spurred buying as it made gold and other commodities denominated in the greenback relatively cheaper. Elsewhere, gold rose in line with the higher oil price which increased the metal's appeal as a hedge against inflation.
Global economic uncertainty, meanwhile, spurred safe-haven buying and expectations the US Federal Reserve will cut its main interest rate by half a percentage point this month kept the dollar weak, in turn helping gold's rally.
Gold has become the 'third reservable currency in the world, following the US dollar and the euro... in a world of economic and political confusion, gold reigns,' said Dennis Gartman, editor of daily trading note The Gartman Letter.
US economic weakness, stemming from the subprime crisis has, in part, weakened the dollar while the financial turmoil itself has fueled gold-buying as a safe-haven.
Investors have been keen to buy gold which can be used to either store value or as an asset they can liquidate in times of turmoil to raise cash to cover losses.
'With uncertainty regarding the future path of US economic growth, the current economic woes should continue to support the metal for now,' said Standard Bank analyst Walter De Wet . . .
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