LONDON Gold prices soared to a record $1,174 an ounce here on Monday as a sliding US currency and worries about a possible spike to inflation increased demand for the “safe-haven” metal, traders said.
Gold hit exactly $1,174 an ounce in late trading on the London Bullion Market. It later pulled back slightly to stand at $1,170.32.
“Gold reached new highs as the dollar continued its decline,” said ODL Markets analysts in a note to clients.
The dollar slid against the euro Monday on concerns that the Federal Reserve may keep emergency stimulus measures in place for a while longer, traders said.
Comments by a US Federal Reserve official that he would prefer to keep the central bank’s asset-buying programme active beyond its current cut-off date pushed the dollar lower, analysts said.
Oil prices rose more than $2 towards $80 a barrel on Monday due to weakness in the dollar and signs of buoyant demand from China, the world’s second-largest energy consumer.
China’s implied oil demand in October was more than 10 per cent higher than at the same time last year, customs data showed on Monday, in the latest sign consumption is rising in emerging economies despite the lingering impact of the economic crisis.
US crude for January delivery rose $2.10 to $79.57 a barrel by 1443 GMT, after rising to a day high of $79.68 earlier in the session. London Brent crude rose $2.05 to $79.25.
The rapid growth in oil demand from China played a large role in pushing oil prices to a record peak of almost $150 a barrel in July 2008, before the economic crisis slashed demand for fuel around the world.
But the resilience of Chinese economic growth, which looks poised to hit 8 per cent in 2009, has helped oil prices more than double since plumbing lows below $33 a barrel at the turn of the year.
Dollar-priced commodities have also been boosted by a slump in the US currency, which has shed almost 25 cents against the euro in a little over eight months.
Investors have been buying into commodities in a bid to hedge against the dollar’s weakness and to guard against concerns ultra-easy monetary policy could lead to a jump in inflation as the world’s economy recovers.
Agencies
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