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Gold price rises to 24-year high

Gold price rises to 24-year high
Wednesday December 7, 2005

SINGAPORE: Gold rose to a 24-year high in Asia as fund managers bought the precious metal to diversify their portfolios.

Investment funds tracking commodity indices attracted US$15bil more cash in the past five months as investors sought alternatives to stocks and bonds and as a hedge against inflation, Barclays Capital said on Dec 2. Gold may reach US$515 an ounce in the next day or two, said trader Darren Heathcote.

“Demand is still high, whether it be Asia, London, New York,'' Heathcote, head of trading at N.M. Rothschild and Sons (Australia) Ltd in Sydney, said. “Gold is still proving relatively attractive as an alternative asset class.''

Gold for immediate delivery rose as much as US$1.80, or 0.4%, to US$511.20 an ounce, the highest since April 1981. The metal traded at US$509.52 at 2:22pm in Sydney.

Gold has risen 16% this year, heading for a fifth straight annual gain, outperforming a 4.1% rise in the Standard & Poor's 500 Index.

Gold for delivery in February rose as much as US$2.20, or 0.4%, to US$514.80 an ounce in after-hours trading on the Comex division of the New York Mercantile Exchange, the highest since February 1983. It traded at US$513 at 2:21pm Sydney time.

Demand from jewellery makers, who account for 73% of total consumption, may slow with buyers reluctant to pay current prices, Michael O'Neill, chief executive of the Melbourne-based Australian Gold Council said in an interview. – Bloomberg


LINK: http://biz.thestar.com.my/news/story.asp?file=/2005/12/7/business/12792475&sec=business