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Gold hits $1 000 at 18-month high

09 September 2009 13:47 (UTC +04:00)

Bakuâ€“ APA-Economics. Gold futures rose Tuesday to an 18-month high, as a weaker dollar boosted the metal’s investment appeal, but ended the day below the $1,000-an-ounce mark. Silver and copper also rallied.
The thinly traded September contract rose as high as $1,006.90 an ounce on the Comex division of the New York Mercantile Exchange, the highest level for a nearby futures contract since March 18, 2008.
The contract ended at $997.90, up $3, or 0.3%. It’s the highest settlement for a nearby contract since Feb. 20. Also on the Comex, the most active contract, for December delivery, ended up $3.10, or 0.3%, at $999.80 an ounce.
The London gold fixing, a global benchmark, rose to $1,000.75 Tuesday afternoon, its highest level since March 18, 2008.
"The higher the price, the higher the volatility, but this market is so concerned with inflation possibilities and dollar weakness that momentum is bringing more investors to the buy side," said George Gero, a precious-metals trader for RBC Capital Markets.
Among other metals, December silver futures rose 22.5 cents, or 1.4%, to $16.51 an ounce, after rising as high as $16.86. December copper futures gained 8.95 cents, or 3.1%, to $2.956 a pound. Copper futures have more than doubled this year, while silver has gained nearly 50%.
The U.S. dollar fell to a new yearly low versus the euro and tumbled versus other major rivals, undercut as investors continued to show rising appetite for risk. The dollar index, which measures the greenback against a basket of six major currencies, fell 1.2% to 77.186.
"Gold broke out from a pretty tight summer trading range mainly due to further concerns over the U.S. dollar’s status as a global reserve currency," said Brian Hicks, co-manager of the $570 million U.S. Global Investors Global Resources Fund. "Additionally, gold appears to be catching up to other commodity bellwethers, such as crude oil and copper."
Gold has risen 13% this year, while crude has jumped nearly 60%.
Holdings in SPDR Gold Trust, the biggest gold exchange-traded fund, stood at 1,077.63 metric tons Friday, slightly lower from a day ago.
It’s unclear how sustainable the rise above $1,000 an ounce will turn out to be, wrote analysts at Commerzbank in a note to clients. "The last two times when it occurred -- in February this year and in March last year -- the price increase was only temporary and ended in a massive correction below the $900-an-ounce level," they said.
"Seasonal trends seem to make this less likely though, as physical gold demand typically picks up around autumn and winter time."
Gold prices typically rise in September, a MarketWatch analysis of the historical record shows, as the start of holiday seasons in the world’s biggest gold-consuming countries tends to drive demand.
In other metals, October platinum rose $30.50, or 2.4%, to $1,289.60 an ounce, and December palladium gained $2.60, or 0.9%, to $298.60 an ounce. Source: MarketWatch