Gold futures in New York surged above $780 an ounce early on Friday as commodity funds and investors aggressively added positions amid a falling dollar and crude oil rally. Silver contracts also surged above $14 on pent-up demand and support from technical charts.
"There is good buying coming in here, all because of the currency situation. The dollar again being hit and the energies are up huge. Also, the turmoil in Iraq and Turkey is setting up oil and we are following it," said Joseph Guzzardi, a floor trader at Sabin Commodities in New York.
At 10:07 am EDT (1407 GMT), most-active December gold on the Comex division of the New York Mercantile Exchange was up $11, or 1.4 percent, at $782.00 an ounce, trading between $771.80 and $784.50. The dollar fell to record lows against the euro and a basket of currencies on Friday as investors, faced with a run of weak US economic data, anticipated a Federal Reserve interest rate cut next week.
Oil rallied to a record high above $92 a barrel on Friday as the dollar tumbled to a record low, Washington imposed new sanctions on Iran and gunmen shut more oil production in Nigeria. US crude hit a fresh record high of $92.22 in early sessions.
Gold is used by investors as a hedge against inflation, while a lower dollar makes gold, which is denominated in the greenback, cheaper for holders of other currencies.
Meanwhile, bullion used to back StreetTRACKS Gold Trust, the world's biggest gold exchange-traded fund, climbed to record 597.53 tonnes on Friday. However, the tonnage growth of the gold ETFs has slowed in October, analysts said.
Meanwhile, silver outpaced gold's gains for a second straight day. Comex December silver was up 31.5 cents, or 2.2 percent, at $14.220 an ounce, trading between $13.950 and $14.270.
Other traders also cited chart-based support for the white metal. Unlike gold, silver has a strong industrial-demand component, and its price tends to be far more volatile than gold bullion.
Spot bullion traded at $778.20/778.70, compared with the Thursday New York close at $767.90/768.70. London bullion dealers fixed the morning spot reference price at $775.60.
Spot silver quoted at $14.14/14.18, higher than Thursday's late New York quote of $13.86/13.91. London silver was fixed at $14.07. Nymex January platinum gained $9.30 to $1,463.00 an ounce. Spot platinum was quoted at $1,454/1,458. December palladium was up $5.45, or 1.5 percent, at $374.95 an ounce. Spot palladium fetched $369/373.
Comments
Comments are closed.