(REUTERS) Gold clears $390/oz on speculative buying
By Meg Clothier
LONDON, Oct 30 (Reuters) - Gold sailed through $390 an ounce on a wave of sp
culative buying
on Thursday morning in Europe, traders said, repositioning bullion for a fresh a
tempt on seven-year
highs scored last month.
"A little bit of borrowing on the forward month sparked it off and then a ma
or house went
round buying, which lifted everyone. And when we went through $390 there were qu
te a lot of
stops triggered," one trader said.
After a bull run last week, gold seemed to pause for a period of consolidati
n, dipping down
as far as $380.00 an ounce on Wednesday, but by 0957 GMT it was trading at $389.
5/390.50, having
hit a session high of $390.50.
"I imagine somebody's going to make a stand for it to stay up for the day,"
he trader said.
Platinum had also advanced to trade at $757.00/762.00, a fresh 23-year high.
Analysts said funds were increasingly speculating in both precious and base
etals in the
hope of benefiting from an upswing in prices in the early stages of a what some
re calling a
global economic recovery.
"You name it, if it's metallic and shiny they seem to buy it," John Reade, a
analyst at
UBS Investment Bank said.
"There's a lot of money that four years ago would have been heavily interest
d in equities,
which having been kicked pretty hard in those markets is now seeking to diversif
. They are
playing other asset classes more than they probably have done in a decade," he s
id.
Gold's next hurdle remained the seven-year highs around $393 an ounce hit in
September.
Reade said technical analysts were warning that another failed attempt on th
s level could
a leave a triple top on the charts, which the market would see as a difficult hu
dle.
Copper and lead rose to six-year highs, while zinc and aluminium reached the
r highest levels
for 2-1/2 years on the LME on Thursday.
((For related news and prices, click on the codes in brackets:
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((Reporting by Meg Clothier; meg.clothier@reuters.com))
REUTERS
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