Gold hits new record high on dollar weakness
Gold prices hit a fresh record high above $1,130 an ounce on Monday and
traders reported fund buying, with a weak dollar offering additional
support.
Reuters
Published: 9:46AM GMT 16 Nov 2009
"Someone had an interest in making a new high," said Michael Kempinski, a
trader at Commerzbank. "Technically it's looking quite good now ... quite
bullish levels."
"There is no bullish news that can give a reason for the move, so maybe
someone is playing games and trying to protect their position," he added.
"$1,150 is the next level."
Mr Kempinski added that gold, which touched a high of $1,132.95, was also
buoyed by a weaker dollar and rising oil prices.
A weak US currency makes metals priced in dollars less expensive for holders
of other currencies.
The dollar drifted as currency markets focused on US President Barack Obama's
visit to China and what he might say about the dollar and the Chinese yuan,
which the US and many other Western nations believe to be undervalued.
Gold has gained 10pc in the past 2½ weeks.
Sentiment was also fuelled by comments from investment fund BlackRock, a
manager and adviser to the US Federal Reserve, that gold would rise further
and central banks would be net buyers of gold this year.
"The most recent break-out in the gold price in US dollars has caused
most gold prices to start trending higher at the same time," Evy
Hambro, who runs two BlackRock commodities funds that are among the world's
largest commodities funds, said in Sydney.
He added that investors were now looking for gold to rise in other currencies
as well as US dollars.
"When you start to see the price rising in a range of different
currencies, it is a clear sign of a very strong market to come," Mr
Hambro said.
Demand for Gold was also helped by a pledge from Asia-Pacific leaders to
continue with stimulus measures. This would mean continued low inflation,
which has led to investors to seek higher returns in other asset classes.