Gold near eight-month high in Asia, $450 in sight

13 Aug, 2005

Gold held near its highest level in eight months in Asia on Friday and was expected to breach key resistance at $450 soon, helped by dollar weakness and record-high crude oil prices.
Spot gold was $445.25/445.75 an ounce, little changed from the $445.30/446.10 an ounce last quoted in New York on Thursday, where the yellow metal jumped around $8 on investment buying.
It had hit $447 an ounce in New York its highest level since December 8, 2004, when the yellow metal traded at $450.60 an ounce. "The next target is $450 within a month," said Yukuji Sonoda, a precious metals analyst at Daiichi Commodities in Tokyo.
Dealers said gold would track currencies ahead of Friday's US trade data and would be supported by crude oil prices, which hit another all-time, peak above $66 a barrel.
Gold often benefits from rising oil prices because the yellow metal is used as a hedge against inflation. The euro was little changed from New York levels at around $1.2466 near the two-and-a-half-month high of $1.2467 hit on Thursday.
A weaker dollar makes dollar-priced gold more attractive for holders of other currencies. "The US government is increasing interest rates but many people are anxious about the future of the dollar because of the big deficit," said Sonoda, referring to the United States' current account and budget deficits.
Other precious metals also rose, with platinum hitting a 15-month high due to fund buying in Tokyo futures. Spot platinum was at $918/923 an ounce, versus $912/916 an ounce last quoted in New York.
Sister metal palladium was at $187.50/192.50 an ounce, versus $185/190 in the US market. Silver was at $7.17/7.20 an ounce, versus $7.15/7.18 in the US market.

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