Gold breaks 28-year record to hit $859 per ounce

Unrest in Pakistan, a faltering dollar and surging oil futures sent the price of gold soaring to a record high on Wednesday [2 Jan 2008], beating its previous highest level set 28 years ago. The precious metal rose to 859 dollars, smashing its peak of 850 dollars an ounce reached on January 21, 1980. It later slipped back to 855.28 dollars on profit-taking.

"Although conditions remain on the thin side ... (gold's) move suggests that funds may have made additional moves into bullion with Pakistan remaining on edge and investors nervous about financial markets," said Kitco Bullion Dealers' analyst Jon Nadler. "A sharp rise in crude oil ... and a softer US dollar" contributed to gold's rally, he added. Political unrest in Pakistan has led to interest in gold because the precious metal is regarded as a haven in troubled times.

A falling US unit encourages demand for dollar-priced commodities such as gold because it makes them cheaper for buyers using stronger currencies. Higher oil prices also encourage the buying of gold. Gold is seen as a defence against inflation, which is being driven in many countries by higher oil prices.

Crude oil hits $100.00

news.yahoo.com :

Oil prices vaulted to a record $100 a barrel on Wednesday [2 Jan 2008] as violence in Nigeria, tight energy stockpiles and a weaker dollar triggered a surge of speculative buying, dealers said. "Oil hitting $100 a barrel has sparked some concerns about the consumer and inflation," said Todd Salamone, vice president of research at Schaeffer's Investment Research.

U.S. crude traded once at $100 a barrel, up $4.02, before easing back to settle $3.64 higher at $99.62. Crude prices jumped 58% in 2007, the biggest annual gain this decade. Oil prices have nearly tripled since 2000 - driven by rising demand in China and other developing countries, tight stockpiles and geopolitical turmoil.

Weakness in the dollar has added to gains across the commodity sector as investors supported the underlying value of products denominated in the softening currency. A further decline in U.S. crude stockpiles - already running at a three-year low - was also expected. Stocks of crude in the United States were expected to have fallen 2.2 million barrels last week, the seventh straight week of decline, as refiners processed more crude.

- Welcome to $100 oil.

See also :

1. Crude oil hits $99.29 (20 Nov 2007)
2. Crude oil hits $98.03 (7 Nov 2007)
3. "It's going crazy" ($93.80) (29 Oct 2007)
4. Another day, another record ($92.79) (29 Oct 2007)
5. Oil rises to record $91.10 (26 Oct 2007)

(2008-01-03 07:52:20 SGT) [Energy] Permalink Comments [1]

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