Gold surges to fresh 25-year high
By Ciara Linnane, MarketWatch
Last Update: 7:36 AM ET Dec. 12, 2005
NEW YORK (MarketWatch) - Gold futures surged as much as $14 an ounce early Monday, gaining for an eighth consecutive session amid fresh reports of investment fund demand in Asia and the Middle East.
Gold for February delivery was last up $11 at $541.20 an ounce, having earlier peaked at $544.50, its highest level since 1981.
The contract has added $43 since the beginning of December and is up 19.4% for the year to date, driven by strong physical demand, central bank buying and inflation concerns.
"This is the eighth consecutive trading day that a new major trend high has been logged and the fifth straight day when the magnitude of gains has increased," said economists at Action Economics, who cited reports of strong investment fund demand for the metal in Japan, India, China and the Middle East.
Peter Grandich, editor of the The Grandich Letter, said today's surge can also be attributed to short-covering by investors who had heavily shorted the metal in the hopes of capping the price.
"While the inevitable profit-taking will surely arrive, players who don't accept the belief that this group existed will continue to scratch their heads trying to explain gold's explosion to the upside," he said.
Gold has two multi-decade resistance areas going back to 1981 - the $540 area that the contract is currently trading at and the old highs of $850 an ounce, said Grandich.
Other metals also rallied. Silver for March delivery was up 20 cents at $9.295 an ounce, platinum added $5.30 to $1,012.20 an ounce and palladium was up $14.95 at $301.50 an ounce.
Copper was up 1.15 cents at $2.0415 a pound.
On the supply side, inventories of copper were unchanged at 3,681 short tons as of late Friday, according to Nymex. Silver supplies were up 564,000 troy ounces at 118.8 million troy ounces and gold was down 1,299 ounces at 6.679 million troy ounces.
Ciara Linnane is markets editor for MarketWatch in New York. |
