Gold soars to new record peak

20th September 2010, Comments 0 comments

Gold prices rocketed to a fresh record above 1,283 dollars on Monday, as the metal was lifted by the weakening US dollar, dealers said.

The metal surged to 1,283.80 dollars an ounce at 4:30 pm (1530 GMT) on the London Bullion Market.

The dollar wobbled Monday on the eve of the US Federal Reserve's latest interest rate meeting, as dealers bet that the central bank could decide to expand its purchases of US government bonds.

"Speculation of further quantitative easing of US monetary policy is weighing on the US dollar ahead of tomorrow's Fed meeting and thus pushing gold prices up," said Commerzbank analysts in a note to clients.

"It is therefore not surprising that investor interest (in gold) is persistently high," they added.

A weaker greenback boosts demand for dollar-priced gold, which becomes cheaper for buyers using stronger currencies. In turn, that tends to lift prices.

Gold began its latest record-breaking run last week, as investors sought a safe-haven for their cash, amid jitters over the global economic recovery and fears of higher inflation.

© 2010 AFP

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