Gold, silver shine to new highs
Gold touches new 25-year peak, silver follows, reaching highest point since early 1984; metals get lift from oil, geopolitical concerns.
money.cnn.com
January 31, 2006: 10:30 AM EST
LONDON (Reuters) - Strong fund buying lifted gold to a new 25-year peak and silver to its highest for 22 years on Tuesday as firm oil prices and political concerns focusing on Iran and the Middle East boosted metals' safe-haven appeal.
Gold and silver were seen aiming to hit next big targets of $600 and $10 an ounce in the coming weeks after rapidly rising this year and making impressive gains in 2005, dealers said.
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Spot gold hit $571.00 an ounce before easing to $569.40/570.30 an ounce by 6:00 a.m. ET. It closed in New York on Monday at$566.40/567.30.
Gold gained 18 percent and silver surged by 30 percent in 2005. Both the metals have risen 10 percent and 13 percent respectively this year.
"Geopolitical and inflationary concerns have supported the continual flow of money into gold due to its status as a safe haven and diversifying asset class," said John Meyer, analyst at Numis Securities Ltd.
Oil gained ground above $68 a barrel as international pressure grew on fourth-largest exporter Iran over its nuclear program.
The five permanent members of the U.N. Security Council agreed on Tuesday that the U.N.'s nuclear watchdog, the International Atomic Energy Agency, should report Iran to the Council over its nuclear program when it meets in an emergency session on Thursday.
Analysts said uncertainty mounted in the Middle East, with Hamas, the Islamic militant group, sweeping to victory over the long-dominant Fatah party in the Palestinian polls.
World powers trying to broker Middle East peace said Islamic militant group Hamas must reject violence and recognize the state of Israel or risk losing vital aid when it forms a new Palestinian government.
Silver spikes
Silver spiked to its highest level since early 1984 on expectations that an exchange-traded fund might be launched soon. It also gained strength from gold's rally, dealers said.
Spot silver rose as much as $9.92 an ounce before falling to $9.85/9.88, compared with $9.74/9.77 in New York.
James Moore, analyst at TheBullionDesk.com, said in a report that silver could easily rise to $10 in the near term. The actual launch of the fund might boost demand for the metal and lift prices by another $1.50 an ounce. |
