Thursday February 21, 2008

Gold rises to record $949.20 as oil sparks demand for inflation hedge

bloomberg.com :

Gold futures rose to a record $949.20 an ounce after energy costs jumped to the highest ever, boosting the appeal of the precious metal as a hedge against inflation. Crude oil rose to a record for a second straight day, reaching $101.32 a barrel and extending the rally in the past year to 73%. Gold has touched a record 11 times this year, after jumping 31% in 2007 as U.S. inflation accelerated at the fastest pace since 1990.

The precious metal has more than tripled in price during a seven-year rally. Last year's gain was fueled by Federal Reserve interest-rate cuts that helped send the dollar down 9.5% against the euro. The federal funds rate is at 3%, down from 5.25% in mid-September.

- It looks like $950 is the resistance level to watch out for. A breakout above $950 will set the stage for $1000 gold and beyond.

See also :

1. Gold soars above US$920 as power crisis closes South African mines
2. Gold reaches record, breaching $900, on US interest rates
3. Crude oil hits $101.32 on increased demand, rate cuts
4. Fed slashes rates another half a point to blunt economic slowdown

(2008-02-21 21:37:15 SGT) [Biz] Permalink

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