Gold hits record high
Posted by | Posted in Business News | Posted on 11-09-2009
NEW YORK (CNNMoney.com) — Gold prices settled at a new record high of $1,006.50 on Friday, rallying ahead of the $1,000-an-ounce mark for the third time this week. /ppGold for December delivery rose $9.60 Friday and settled ahead of the previous record high of $1,003.20 that was posted March 18, 2008. /ppMuch of the gains this week have been driven by the U.S. dollar, which has fallen out of favor./ppThe dollar index, which tracks the greenback against the euro, yen and four other currencies, hit a one-year low this week, hitting 76.511 on Friday. /ppThis is new significant level for the dollar, said Kathy Lien, director of currency research for Global Forex Trading. The dollar hasn’t been this weak since September 2008. /ppIn a jittery economy, commodities priced in dollars, such as gold, are perceived as safe investments and typically gain ground when the greenback wanes./ppThe dollar has declined against the yen for the fifth straight week and is at its lowest level against the euro since December 2008, according to Global Forex Trading. /ppGold prices have been holding up better now than in previous occasions when they tried to rally high. Many [investors] were waiting for the $1,000-mark to be broken, said Carlos Sanchez, a precious metals analyst at CPM Group. The dollar has been weakening so that’s been a supportive factor./ppbGold will hold./b Analysts think gold will continue its upward momentum, at least for the next few months. CPM’s Sanchez said he expects prices will hold above $1,000 mark as the year ends, even if the dollar rallies./ppYou may see the dollar recover somewhat and put downward pressure on gold prices. But even if there’s a pullback, gold will go back up the last 2-3 months this year, Sanchez said./ppAnd if the dollar is headed lower, as Lien anticipates, gold prices could remain strong even longer. /ppThere will be relief rallies along the way, but I expect a 2% depreciation of the dollar against major currencies over the next six months, Lien said. /ppbA grand history:/b Before settling at $1,000.70 on Sept. 8, gold neared the $1,000-mark in late February when investors feared that Citigroup (C, Fortune 500) and Bank of America (BAC, Fortune 500) might need to be nationalized./ppThe last time the metal surged above $1,000 in a volatile economy was in March 2008, when it hit a record high of $1,014 when Bear Stearns was on the verge of collapsing./ppBut gold prices fell to $720 an ounce last October when the dollar rallied, and hit their lowest point in November before beginning a choppy climb. First Published: September 11, 2009: 2:09 PM ET/p style #cnnfb_connect {background-color:#f5f5f5;width:auto;height:auto;padding:10px;clear:both;} /style script src=http://static.ak.connect.facebook.com/js/api_lib/v0.4/FeatureLoader.js.php type=text/javascript/script Stocks try to stretch the advance Uh oh. Gold’s near $1,000 Insiders sell like there’s no tomorrow
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