Speculative buying boosts gold near its 18-year high
Speculative buying boosts gold near its 18-year high By Maria Silander November 21 2005 12:10
Strong speculative demand lifted gold to a new near-18 year peak in London on Monday. Gold rose to $489.75 a troy ounce, its highest price since December 1987 on speculation that some central banks may want to increase their reserves and after a report showed hedge funds increased their holdings in the metal.
In morning trade bullion eased to $487.90/488.70 a troy ounce. Gold has risen about $20 a week, and more than $50 this year.
Investors also were being drawn to gold as a haven because of the threat to financial markets from avian flu in Asia, the war in Iraq and the riots in France’s suburbs, traders and analysts said.
Analysts expect gold price to hit $500 within the next few months.
Natural-gas prices surged to their highest in more than eight months in UK as freezing weather sent demand climbing amid falling supplies. Chevron reported gas production cuts at the Britannia gas field on Monday.
Gas for delivery today surged 47.5 pence, or 65 per cent, to £1.20 a therm at the National Balancing Point. That is the highest price since the beginning of March 3 when the contract jumped to £1.75 a therm. A therm is 100,000 British thermal units. Later in morning trade the contract slipped back to £1.05 a therm.
Gas prices for delivery Tuesday jumped 33 per cent to £1 a therm compared with Friday’s closing gas price of 75 pence a therm for Monday delivery.
The demand for gas rose because of freezing temperatures in parts of Britain and Germany. UK’s national weather service said on Monday that cold weather might possibly linger through the week. Fuel consumption for heating in northeastern parts of the US will be also be above normal this week, US forecasters said.
Crude oil climbed on expectations that colder weather in Europe and the US will increase demand for heating. Brent crude for January delivery jumped $1.08 to $55.95 a barrel in London while West Texas Intermediate, benchmark for US crude oil, rose 91 cents to $58.12 a barrel.
Copper stayed near its Friday’s all-time high on the London Metal Exchange although a report said China’s State Reserves Bureau would export 30,000 tonnes of the red metal by month-end. The three-month copper contract was quoted at $4,201.5 a tonne, up $1.50 from Friday’s close.
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