Gold touches $530/oz
Saturday, December 10 2005 - 01:41 AM WIB
"This buying is just more of the same of what we have been seeing. I suspect also that it may be central bank buying that is supporting it on the dips," Paul Merrick of RBC Capital Markets said.
"Gold's rally seems relentless and it feels as if it wants to continue higher" despite prices standing at technically overbought levels, said James Moore, an analyst at TheBullionDesk.com.
Spot gold changed hands at $526.50/527.20 an ounce in New York, up from $519.50/520.30 last quoted on Thursday. The metal has soared roughly $75, or 16.4 percent, since November 7.
Gold's tight supply, strong global demand, worries about inflation and growing fund interest in precious metals and other commodities have unleashed a wave of speculative buying, defying warnings that the market was overbought.
Fund managers were buying as part of a strategy to diversify portfolios, while some investors were speculating about potential purchases from some of the word's central banks -- previously long-time sellers.
"I strongly believe that Asia and China are buying -- but we will not know until they've finished buying or are close to it, for sure," said Juerg Kiener, chief investment officer at Singapore-based hedge fund Swiss Asia Capital, referring to central banks in the region.
In November Russia, Argentina and South Africa expressed interest in increasing their gold holdings, even though European central banks have sold more than 100 tonnes since September.
COMEX February gold at the New York Mercantile Exchange rose $7.50, or 1.4 percent, at $530.20 an ounce. The day's high, at $534.30, was the loftiest for futures since April 1981.
The price of gold has gained about 21 percent this year and has doubled in about five years.
"Resistance is expected at around $533, which is the high of April 1981, but I get the feeling gold has another $10 to $15 left to run in the short term before a correction is seen," TheBullionDesk's Moore said.(*)