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Gold jumps to 23-year high
By Zach Howard
NEW YORK, Dec 1 (Reuters) -
Gold galloped to its highest price in almost 23 years on Thursday, driven by
further investment buying after it pierced the key $500 an ounce level
earlier this week.
The rally also sparked buying in the other precious metals, with silver scaling an 18-year peak and platinum and palladium posting gains as well.
Spot gold surged to a near-23-year high at $503 an ounce in New York. It last fetched $503.00/503.75, compared with Wednesday's close at $494.10/494.90.
"It's unstoppable," said Stephen Briggs, economist, SG Corporate and Investment Banking.
"The whole mindset of the market, not just for gold, is just buy, but especially buy the dips."
Gold prices have doubled since touching lows of $254 in 2001 and have gained more than 15 percent this year.
The market's fundamentals have been positive and investors were diversifying their portfolios as currencies were not offering strong returns, analysts said. Inflation worries also persisted given firm oil prices.
"I think there is still room on the upside to go," James Moore, analyst with TheBulliondesk.com, said of gold. "We are going to probably test up to around $509-$512 before the Christmas holiday period."
Some industry experts said gold might exceed its all-time high of $850, achieved in 1980.
James Turk, founder of online gold trading Web site GoldMoney.com, said his target for 2006 was $900.
He said that investors would increasingly turn to gold as a currency alternative and also in response to growing inflation pressures, the huge U.S. current account and trade deficits, and overall strength in commodities.
At the COMEX division of the New York Mercantile Exchange, February delivery gold jumped to $506.80 an ounce-- the priciest for benchmark futures since February 1983. It settled up $7.60 at $506.30.
But physical buying has fallen off in parts of Asia, the leading consumer of gold, at a time when demand normally rises ahead of Christmas and the Lunar New Year.
Silver surged to $8.51 an ounce, the highest since late 1987, and it last fetched $8.51/53 in New York.
The metal, up about 30 percent so far this year, mainly has followed gold's nearly relentless gains.
In New York futures trade, March silver shot up 21.7 cents to end at $8.602 an ounce, after dealing from $8.29 to $8.62 -- the highest since August 1987.
In other metals, spot platinum fell to a one-week low of $972 an ounce in Asia before rebounding to $987/992 in late trading, against the $975/980 last quoted in New York.
At the NYMEX, January platinum gained $14.30 to finish at $994.70 an ounce.
Palladium rose to $261/264, compared with $256/260 an ounce in New York.
March futures touched a 19-month peak at $273 before closing $8.40 higher at $268.40 an ounce.
(Additional reporting by Atul Prakash in London)
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