LONDON (SHARECAST) - Gold moved further into unchartered territory midweek, hitting another record high as the Federal Reserve’s hint at further fiscal stimulus heightened deflation fears.
The December contract jumped $17.80 to $1,292.10 an ounce in New York, but had been as high as $1,298 earlier in the session.
“The increase in the price should continue to be driven by safe-haven demand, motivated by sovereign risk and economic uncertainty,” wrote BNP’s Anne-Laure Tremblay in a research note.
“The increasing prospect for quantitative easing is supportive of gold prices on two fronts: ample liquidity tends to be supportive of asset prices and the move is raising fears of high inflation in the longer term."
There was a 30-year high for silver and a five-month best for copper, while platinum hasn’t traded this high since mid-May.
Oil fell slightly Wednesday on weaker equity markets and a bearish report on US supplies.
Latest data from the Energy Information Administration (EIA) revealed stockpiles increased by 1m barrels last week. That was more than expected, but the feeling is they won’t rise much more.
A lack of any serious storm action in the producing areas of the Gulf of Mexico is also likely to drag oil lower near-term, say analysts.
Even a broadly weaker dollar, normally good for commodities, couldn’t prevent a 26-cent drop in the November crude contract to $74.71 a barrel. Traders blamed risk aversion.
