Gold prices climb above 1,200 dollars on safe-haven buying

08:23, May 07, 2010      

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Gold futures on the COMEX Division of the New York Mercantile Exchange rose above the key level of 1,200 dollar for the first time since last December on Tuesday, touching a five-month high on safe-haven buying as stock markets plunged for the third session, and Greece riots deteriorated. Silver edged down, but platinum rose.

The most active gold contract for June delivery gained 22.30 U. S. dollars, or 1.9 percent, to finish at 1,197.30 dollars. However, the contract soared above 1,200 dollars and saw the strongest level of 1,209.20 since early December 2009 during the electric hours after pit trading.

Fears that financial turmoil will spread from Greece across Europe prompted investors to store value by purchasing the precious metal.

The Greece parliament passed its hotly debated austerity measures on Thursday despite more protests in Athens, where rioting in the streets killed three people on Wednesday as protesters were against to cut government budget.

At the same time, dragged by concerns on escalating Europe debt crisis, the U.S. stock markets went sharply down for the third consecutive session. By the end of gold floor trading time, the Dow industrials lost about 120 points, or 1.1 percent.

During the post-hour trading, the Dow dipped almost 1,000 points to as low as 9,872 before recovering quickly above 10,400. That is considered as the biggest decline ever in Dow's history, which helped gold climb above 1,200 dollars in five months.

July silver lost 1.9 cents to 17.515 dollars per ounce. April platinum was up 16.90 dollars to 1,666.5 dollars an ounce.



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