Bullion pulls silver, platinum to high marks as well
By Chris Oliver, MarketWatch
SAN FRANCISCO (MarketWatch) -- Gold surged to a fresh record Monday, testing $1,900 an ounce amid ongoing concerns over the health of the global economy and talks U.S. officials may offer a fresh round of economic stimulus.
Federal Reserve Chairman Ben Bernanke is set to discuss his economic outlook Friday at the annual gathering of central bankers in Jackson Hole.
Gold for December delivery GC1Z +1.45% advanced $24.40, or 1.3%, to $1,876.60 an ounce. It traded as high as $1,898.60 an ounce, an intraday record for the metal -- and less than two dollars away from the $1,900 point.
“This psychologically important mark is likely to be tested already soon in the current market climate and is probably not a serious hurdle. Uncertainty and nervousness are still high among market players,” analysts at Commerzbank said in a note to clients.
With macroeconomic and geopolitical tensions growing it is not surprising gold “remains in high demand as a safe haven,” they added.
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Investors have poured into the world’s largest gold-backed exchange-traded fund, with holdings into SPDR Gold Trust rising 4 metric tons to 1,290 metric tons as of Friday, inching closer to the record 1,320 metric tons recorded at the end of June 2010.
Gold futures settled at record $1.852.20 an ounce Friday.
Pulled along by gold, silver and platinum also made strong gains.
Silver for September delivery SI1U +2.53% gained $1.09, or 2.5%, to $43.51 an ounce. A close around these levels would be the highest since early May.
Platinum traded as high as $1,901.90 an ounce, a three-year high for the metal. Recently, platinum for October delivery PL1V +1.10% advanced $20.80, or 1.1%, to $1,895.70 an ounce.
Gold and other precious metals benefitted from some expectations of action by the Fed officials.
Some economists said it was unlikely any new policy-easing initiatives would be unveiled Friday, even though the forum last year was used to signal a new round of asset purchases that eventually became known as QE2.
“Expectations are high, but those looking for an outright commitment to QE3 are likely to be disappointed. QE3 may well happen eventually, but the Fed will likely use up more conventional and less controversial tools first,” analysts at Societe Generale said in a note to clients on Monday.
In a separate note, Societe Generale’s analysts said they viewed euro-area sovereign debt issues as among the top risks to the global economy, adding much will depend upon the actions of policy makers in heading off the escalating crisis.
“The US and Europe are growing at close to stall speed and recession risks have increased significantly,” they said.
