Gold hikes to fresh record amid concerns over EU debt, geographical unrest

09:05, April 06, 2011      

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Gold futures on the COMEX Division of the New York Mercantile Exchange on Tuesday settled at the all- time fresh record of 1,452.5 U.S. dollars per ounce, as widespread concerns over Europe's sovereign debt and unrest in the Middle East and North Africa continued to boost safe-haven demands.

The most active gold contract for June delivery hiked 19.5 U.S. dollars, or 1.36 percent, to 1,452.5 dollars per ounce.

Market analysts said that increasing safe-haven demands has underpinned the precious metal market, as the sovereign debt issues continue playing across Europe with the cost of insuring Portugal's debt rising to an all-time high.

Moody's recently downgraded Portugal on concerns the country will have difficulties reaching debt-reducing goals. Portugal is widely expected to follow Greece and Ireland to become third country to seek a bailout.

Moreover, continued fighting in Libya and unrest elsewhere in the Middle East and North Africa also underpinned support for the metal.

Mike Daley, a senior gold analyst with PFGBEST said that Tuesday's rally was made in the face of interest rate hikes from the central banks of China and Poland, which showed that investors were more concerned with inflation than in interest rate tightening.

Mike added that the recent tensions in Libya and the Middle East have sent crude oil skyrocketing and certainly added to the world's rising inflation. Crude oil price on Monday hit the highest level since 2008's September in New York.

Silver for May delivery also increased 68.9 U.S. cents, or 1.8 percent, to 39.183 dollars per ounce. July Platinum also hiked 9.8 dollars, or 0.55 percent, to 1,796.8 dollars.

Source: Xinhua
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