Gold tops key mark 1,500 USD per ounce

08:40, April 20, 2011      

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Gold futures on the COMEX Division of the New York Mercantile Exchange settled at a record on Tuesday, after testing the psychological mark of 1,500 U.S. dollars per ounce, as the U.S. debt concerns weighed on U.S. dollar, boosting the appeal of gold.

The most active gold contract for June delivery gained 2.2 U.S. dollars, or 0.15 percent, to close at 1,495.1 dollars per ounce, after touching the highest level of 1,500.5 dollars in Tuesday's trading.

Market analysts concluded that gold market has gained strengths from a series of favorable forces in the recent trading.

"The underlying factor is inflation,"said Mike Daley, senior analyst with PFTBEST, "the Libyan and middle-eastern climate has sent oil price higher and higher and the traders and investors have to seek gold and silver as their inflationary hedge."

The U.S. consumer-price index rose 0.5 percent year on year in March, while China's inflation advanced 5.4 percent in the period.

For some buyers, a major reason to invest in gold is the worries that government's debt is out of control. While investors are still talking about the debt problems in such European countries as Portugal and Ireland, Standard & Poor's stood out to cut the credit outlook of the world's largest economy, citing " material risk" that U.S. policy makers won't reach an accord on "medium- and long-term budgetary challenges."

The growing concerns over the debt problem in the developed economies have boosted a large number of safe-haven demands and thus, buoyed up the gold market, said analysts.

Moreover, a trader said that the weakness in U.S. dollar also played an important role in enhancing gold's appeal on Tuesday. The dollar index, which measures the greenback against a basket of six currencies, fell to 75.078, falling from 75.504 late Monday. Other metals are also rising. Silver for May delivery added 95.7 dollars on Tuesday, or 2.2 percent, to 43.913 dollars per ounce, refreshing the 31-year record.

Source: Xinhua
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