Gold hits record near 1,300 dollars, silver at 30-year peak

24th September 2010, Comments 0 comments

The gold price soared to a record peak within a whisker of 1,300 dollars an ounce on Friday, dragging sister metal silver to a 30-year pinnacle, as investment demand propelled precious metals higher.

Gold prices struck a record 1,299.90 dollars an ounce in mid-day trading on the London Bullion Market, as investors sought a safe-haven to park their cash amid heightened uncertainty over the global economic outlook.

And silver surged to 21.41 dollars an ounce -- nailing the highest level since October 1980.

"The underlying bullish trend in the gold market continues to be fuelled by the high level of uncertainty regarding the United States and European economies," said SEB Commodity Research analyst Filip Petersson.

"Wealth preservation are the keywords.

"As long as we do not see a reduction in the uncertainty regarding the long-term economic outlook, gold prices will remain well-supported as the currency of choice for risk-averse investors."

He added: "The strategic view remains bullish and we expect prices above 1,350 dollars per ounce before the end of the year."

Gold and silver were also propelled by keen demand from exchange traded funds (ETFs).

ETFs allow traders to invest money more easily in the commodities, without trading on the futures market. They are traded like shares and are widely regarded as an inexpensive and low-risk way of investing.

"Gold is fuelled by a combination of things," said Commerzbank analyst Daniel Briesemann.

"High investment demand can be seen in inflows into gold ETFs," added Briesmann.

"Some central banks in Asia are also diversifying their currency reserves further, even at the current high price levels.

"Furthermore, the general interest of investors is not waning and gold is sought for mainly as a 'stable currency'."

© 2010 AFP

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