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Gold poised to hit a historical high

19 February 2009 13:30 (UTC +04:00)

Baku- APA-Economics. The official rate of gold stood at AZN 777.17 ($964) an ounce in Azerbaijan on February 19 amid gold prices keep ascending on speculation the recession will deepen, boosting the appeal of the precious metal as a haven asset.
Gold futures for April delivery climbed $10.70, or 1.1 percent, to $978.20 an ounce on the Comex division of the New York Mercantile Exchange. Earlier, the price reached $980.20, the highest since July 16. Gold gained 5.5 percent last year.
Silver futures for March delivery rose 28 cents, or 2 percent, to $14.29 an ounce. The metal has gained 27 percent this year after dropping 24 percent in 2008.
Gold demand surged 26 percent to 1,036.5 metric tons in the fourth quarter as the financial crisis spread, the World Gold Council said today in a quarterly report.
On Wednesday, President Barack Obama unveiled details of a $75 billion plan to stabilize the crippled housing market.
Gold may rise above last yearâ€™s record of $1,033.90 on concern that government spending may spark inflation, Bloomberg quoted Tom Pawlicki, an analyst at MF Global Ltd. in Chicago, as saying.
â€œInflation fears emanate from the stimulus package and other spending plans and promises made in the past few weeks,â€ Pawlicki said. â€œIn the first four weeks of the Obama administration, rhetoric seems to be full of uncertainty and promises of more money if needed. Both are bullish for gold,â€
While the stock market and other commodities have sustained big losses in recent weeks, gold prices have become a bright spot among downbeat forecasts for a prolonged recession. Gold tends to uphold its value better than other investments in times of economic turmoil.