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13 April 2024

Gold hits record high near $900

By Agencies


Gold hit a record high near $900 (Dh3,305) an ounce on Friday, driven by hopes of a half-point cut in US interest rates later this month, which could raise the metal’s appeal as an alternative investment.

In the physical sector, fears of further rises ignited buying from jewellers in Indonesia and Thailand, but retail investors in other parts of Asia, especially Japan, cashed in on their holdings to take advantage of sky-high prices.

Spot gold rose as high as $898 before profit taking kicked in, mostly led by Japanese investors. It was later quoted at $893.40/ 894.20, still higher than $889.90/890.60 hit late in New York on Thursday.

Comex gold futures also touched a record high, with the most active February contract rising as high as $899.90 an ounce before slipping to $895.4, up $1.8 from Thursday’s close.

“We are not talking about $900 now. We are talking about $1,000,” said Ronald Leung, Director of Lee Cheong Gold Dealers in Hong Hong. “Of course, sentiment is really bullish, but I think the more bullish the market is, the more dangerous it is,” he said.

Leung expected gold to trade in the $885 to $900 range yesterday but said the market could succumb to heavy profit taking, especially given the extent of long positions held by funds.

Gold, which rallied more than 30 per cent in 2007, entered the New Year on a firm note, rising more than seven per cent on a trail of market-friendly factors including a struggling dollar and record high crude oil prices.

The dollar held near a five-week low against the euro after US Federal Reserve Chairman Ben Bernanke said the Central Bank was ready to take “substantial” steps to shore up a slowing economy.

Bernanke acknowledged the economy faces increased risks and indicated the US Central Bank is ready to cut rates to support growth.

The euro was steady at $1.4809 having risen 1 per cent on Thursday to be back near a five-week peak of $1.4825 last week. (Reuters)

Weak dollar

The dollar hovered near a five-week low against the euro yesterday after tumbling the previous day when comments from Federal Reserve Chairman Ben Bernanke said a half-point rate cut is expected this month. The euro was little changed from the US trade at $1.4800 after jumping nearly 1 per cent the previous day, back to near a five-week peak of $1.4825 a week ago. (Reuters)