No stopping gold bulls as prices hit new peak

Gold futures surged to a new all-time high of US$1,054.60 in Asian trading while spot gold rose to US$1,053.42 an ounce.

Oct 08, 2009 11:10 IST India Infoline News Service

Gold prices extended their record-breaking run for a third successive session on Thursday as the dollar remained depressed ahead of policy announcements from the Bank of England (BOE) and the European Central Bank (ECB).

Gold futures surged to a new all-time high of US$1,054.60 in Asian trading while spot gold rose to US$1,053.42 an ounce.

COMEX gold for December delivery had risen by US$4.70 to settle at US$1,044.40 an ounce in New York trading after ending the previous session at a record US$1,039.70. The previous record close of US$1,020.20 was set two weeks ago.

Gold has gained about 20% this year, helped by the dollar's weakness and inflation worries after governments around the globe unleashed a massive spending spree to combat the worst global recession in decades, fueling demand for the yellow metal.

A weak US currency makes the precious metal more attractive to investors.

Gold is heading for a ninth annual gain as the Dollar Index, a six-currency gauge of the dollar’s value, has shed 6.5% this year.

Strong oil prices also stoked worries about inflation, providing gold with additional fuel to help the rally. Oil prices traded above US$70 per barrel on Thursday, recovering from the previous session when they fell after US data showed a surge in fuel stocks last week.

Gold's rally has boosted inflows into exchange-traded funds for two days in a row. The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said its holdings stood at 1,109.314 tons as of Oct. 7, up 0.8% or 8.8 tons from the previous business day, when they also rose.

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