US precious metals shot to fresh highs on Thursday, carried by another wave of investment buying, with gold and silver reaching their strongest levels in 25 years and platinum scoring a lifetime peak.
Aggressive buying by funds and speculators drove the latest gains in a long-time rally fuelled by strong demand, a weak US dollar and growing diversification into commodities, dealers and analysts said. In base metals, copper, aluminium, zinc and nickel raced to record highs as money kept piling into commodities.
"Silver and gold have been in a trend for about two or three years, but the market has really only now made an incredible, incredible move," said Scott Meyers, an analyst with Pioneer Futures in New York.
June delivery gold finished up 2.2 percent, or $15.80 higher, at $721.50 an ounce on the New York Mercantile Exchange's COMEX division, after trading from $701.20 to $728, marking the highest for futures since September 1980.
Gold has risen 40 percent in 2006 and 65 percent since the start of last year as investors diversify into the metal as a hedge against global tensions, including those over US-Iran relations, oil prices and doubts about the dollar.
A $1 jump in crude oil futures helped spark some of the gold buying as a hedge against inflation, dealers said. Oil was at $73.25 a barrel, a month after it hit a record at $75.35.
Less hedge selling by miners, strong interest in exchange-traded funds, soaring copper, and near-term supply tightness in platinum also supported gold, analysts said.
"It is a general flight into real assets," said Steve Platt, a broker with Archer Financials in Chicago, who also noted a huge amount of fund buying lifting the metals.
"The sellers are pretty reserved in stepping in front of this thing until they see signs that the market has started to ease off," he said.
Platt warned that metals were ripe for some profit-taking with prices having climbed so far, so fast. "I think what we need is some correction just to take some of the froth out."
As to the dollar, analysts said its upside was limited as investors increasingly expect US interest rates to peak soon, after the Federal Reserve raised rates for the 16th straight time Wednesday, taking the fed funds rate to 5 percent.
The dollar fell to a 12-month low against the euro on Thursday, benefiting gold as a US currency alternative.
Spot gold hit a 25-year high at $726 an ounce, and was last at $721.60/722.60, up from $701/702 in New York on Wednesday. Thursday's afternoon fix in London was at $715.50.
Bullion hit a record of $850 in January 1980.
It took gold two years to rise by $100 to $500 an ounce in November 2005 and another five months to hit $600, but it bolted to over $700 in less than a month.
Silver rose above $15.00 an ounce for the first time since January 1981, rising as much as 5.9 percent on Thursday.
COMEX July silver settled at $14.9350, up 65.5 cents or 4.6 percent, dealing from $14.15 and $15.20. Spot silver advanced to $14.94/15.04, versus its last close at $14.20/30. The London fix was at $14.43.
Across the floor at NYMEX, July platinum futures reached a high of $1,299.50 an ounce, before ending at $1,295.60, a rise of $35.90 or 2.9 percent. Spot platinum climbed to $1,293/1,298.
June palladium shot up $9.80 or 2.5 percent to $400 an ounce. Futures earlier hit a four-year high of $401.10. Spot rose to $395/400.
Comments
Comments are closed.