US gold futures hit a six-month high of $1,000 and spot gold also rose to six-month high on Tuesday as the dollar's weakness, concerns about the sustainability of the global economic recovery and worries about inflation underpinned sentiment. Some market players were cautious about prices sustaining $1,000, however, saying the rally had been driven by speculators and gold was an expensive buy in historical terms.
Futures have topped $1,000 nine times - three times this year and six last year, including a record $1,033.90. Spot prices have risen above $1,000 just four times - once in February and three times in March 2008, when they hit a record $1,030.80.
"Futures were always going to lead the way above $1,000, so spot can't be far behind. Gold's rising price is due to uncertainty all the way from personal investors right through to institutions," said Sandra Close, an analyst for gold research group Surbiton Associates.
"There are questions out there over the health of economies, where interest rates are going. All that encourages gold hoarding. There's potential to see the price go even higher," she said. Spot gold rose as high as $997.90, its highest since February, when it briefly topped $1,000, before easing to $997.00. New York's notional close was $993.85. At 0550 GMT, it was trading at $996.95. US gold futures for December delivery touched $1,000 briefly before slipping to $999.30 per ounce. Futures settled at $996.70 on Friday. US markets were closed on Monday for the Labour Day holiday.
ARE HIGH LEVELS SUSTAINABLE?Despite gold hitting $1,000, it is far from an inflation-adjusted record, which analysts at GFMS have put as high as $2,079 per ounce. Some analysts have said the higher gold price reflects uncertainty across markets about how central banks will untangle themselves from fiscal stimulus aimed at reviving economic growth, as well as dollar weakness.