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Gold stays close to 17 year high { September 15 2005 } Original Source Link: (May no longer be active)
http://news.ft.com/cms/s/f55d29b8-25d3-11da-a4a7-00000e2511c8.htmlhttp://news.ft.com/cms/s/f55d29b8-25d3-11da-a4a7-00000e2511c8.html
Gold stays close to 17-year high
By Kevin Morrison
Published: September 15 2005 12:03 | Last updated: September 15 2005 21:01
Gold on Thursday moved to within striking distance of its highest level in more than 17 years as speculators continued to buy the precious metal as a hedge against further falls in the dollar due to the high US trade and budget deficits.
Bullion peaked at $455.10 a troy ounce in London trade, its highest level since last December’s peak of $456.75, which in turn was a level previously reached in December 1987.
George Gero, a gold trader at Legg Mason in New York, said speculators were continuing to buy gold because they thought the dollar might have further to fall. The late rise came despite weakness in the euro. Gold normally moves in tandem with the single currency, but it has de-coupled on several occasions this year as investors have attempted to value the precious metal as a currency.
“There is a lot of interest in gold at the moment, I think we could be looking at new highs very soon,” said Mr Gero.
If gold does break last December’s high it will be the longest bull market run for bullion since it was freely floated in 1968. The metal’s fortunes turned around in the summer of 2001 when it hit a 22-year low of almost $250 a troy ounce. The rise is largely the result of a decline in the dollar.
Gold’s gain also pushed other precious metals prices higher. Silver reached an intra-day high of $7.07 a troy ounce, before settling at $6.97/$7.00. Platinum reached an intra-day high of $916 a troy ounce. Traders said if platinum continues its advance it could make an assault on its 24-year high of $942 touched in April 2004.
The gains in precious metals were not shared in base metals where nickel prices dropped below $13,000 a tonne on the London Metal Exchange, their lowest level since December 2004. Traders said the price fall reflected fading concerns about a workers strike at mines operated by Inco, the Canadian nickel producer.
Oil prices were volatile with early gains inspired by fears of inadequate winter fuel supplies in the US. But the gains were reversed in later trades as the focus turned to the threat of declining demand.
The Organisation of the Petroleum Exporting Countries, the oil cartel, said 2005 demand would increase by 1.7 per cent to 83.5m barrels a day, down from its previous estimate of a 1.9 per cent rise.
IPE Brent for October delivery slipped 21 cents to $63.16 a barrel at the close of London trade, having reached close to $64 earlier in the day.
October Nymex WTI eased 34 cents to $64.75 a barrel in New York trade. US gasoline and heating oil futures were also lower.
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