GOLD rallied 5% on Friday, briefly breaking above the $900/oz level as volatile currency markets and solid investment demand spurred bullion buying. The precious metal reached record highs in both sterling and euro terms, signaling bullion’s strength against not only the dollar but also currencies across the board.
“I think that people are coming to the new year realising that the financial crisis is going to last longer than they had expected,” Caesar Bryan of Gamco Gold Fund said.
Bryan said more nervous investors were turning to gold because of high volatility in the foreign exchange market. Spot gold rose as high as $902,50/oz, which was the loftiest price since October 10.
It was at $895,80/oz by mid-afternoon, up 4,7% from Thursday’s last trade of $855,50.
It rose to a record high of € 700,37 in euro terms, and a record £659,71 when priced in sterling.
US gold futures for February delivery settled up $37, or 4,3%, at $895,80/oz on the Comex division of the New York mercantile exchange.
“There is ongoing nervousness in the market about the banking sector,” Tom Kendall, precious metals strategist at Mitsubishi said. “If you are looking to park your cash, there are not many options around and gold is one option.” Reuters
