Precious metals at record high prices |
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Published
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Fri, 31 Mar 2006 13:40
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NEW YORK: Precious metals reached record prices in world markets Thursday. Gold hit a new 25-year peak, platinum was at a record high and silver sped to its highest in more than 22 years.
Traders said fund managers have brought more money into the commodities market before the end of the quarter, which contributed to the spiral. These metals also got support from technical buying, strong base metals and a softer dollar, they added.
Traders said fund buying and short covering continued to help the prices going up but this is not different from a year ago. These metals are seeing long-term bull markets and they just keep on moving higher, they felt.
Gold reached $586.70 an ounce, its strongest since January 1981, before trading at $586.20/587.10 late in New York, an increase of 2.3 per cent. Since the beginning of the year, the metal's price has seen an increase of 14 per cent. Market watchers say the metal will touch $600 anytime now.
It also got support from a weakened dollar Thursday as gold becomes cheaper for holders of other currencies and lifts its buying.
Spot silver touched $11.70 an ounce, the highest since September 1983. It was at $11.62/11.65 -- having gone up 4.8 per cent on the day. The metal has risen by more than 13 per cent since last week. The decision to set up an exchange-traded fund also contributed to the price hike. Traders feel silver will touch $12 and reach $15 in the medium term.
Platinum reached its highest-ever level of $1,090 an ounce, ending at $1,088/1,092, against $1,071/1,075 previously.
In the last 12 months, silver has gone up by a staggering 66 per cent, while gold and platinum have recorded 36 per cent and 27 per cent increases respectively.
Investment and hedge funds are bringing money into the precious metals market as they believe the new exchange-traded funds will make it easier to own bullion. There is also speculation that the U.S. government may allow the dollar to weaken further.
Hedge funds and other large speculators have increased their exposures to gold in the week ending 21 March on the assumption that gold futures will rise.
The dollar had fallen against the euro and yen Thursday on the fear the many investors may chose to dump U.S. assets in case the U.S. administration opts for a weaker currency to help economic growth and employment.
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Gold price at record high as many find it sound investment 