Gold futures advance to record high against weakening dollar

11:20, October 06, 2010      

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Gold futures on the COMEX Division of the New York Mercantile Exchange on Tuesday continued the record-making process, finishing at a new closing high, as dollar fell to its lowest level since January. The silver also resumed hiking and pushed the 30-year record to a new high.

The most active gold contract for December delivery gained 23.5 dollars, or 1.8 percent, to close at 1,338.9 dollars per ounce.

The greenback fell to the lowest level since January against a basket of six currencies. The central bank of Japan Monday announced that it would pump more funds into the struggling economy and keep interest rates virtually at zero, which incurred concerns that the U.S. Fed would also take the same measures and thus, further weighed on the dollar.

A gold trader noted that monetary easing in Japan reinforces gold's role as a store of value and predicted that the gold price may reach 1,500 dollars by the end of the year and 2,500 dollars in the next year.

The gold price has gained 20 percent so far this year, heading for the 10th straight annual gain and the longest rally since at least 1920. The metal has far outperformed global equities and Treasuries, prompting record investment in gold.

However, the consecutive hiking in gold price also triggered concerns over market correction. A senior market watch noted that he is suspicious of buying more gold here at the current levels, and expected that the gold prices might well fall 80-100 dollars in the next several weeks.

Underpinned by the weakening dollar, the silver and platinum also joined the rising line. December silver climbed 70.1 cents, or 3.2 percent, to 22.737 dollars. January platinum added 28.6 dollars, or 1.7 percent, to 1,700.7 dollars per ounce.

Source: Xinhua

(Editor:李牧(实习))

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