New record for gold price at $923 Friday, 25 January
2008, 17:17 GMT
The price of gold has set another record high, reaching $923
an ounce, after power cuts in South Africa closed mines and
fuelled supply fears.
The metal was also boosted by the rise in oil prices. New
York crude jumped $1.19 a barrel, extending heavy gains on
Thursday to trade close to $91.
Gold is seen as an attractive investment in times of economic
uncertainty and oil-led inflation.
Gold prices increased by more than 30% in 2007 and further
gains are forecast.
Since the start of the year, the gold price has set a series
of records, as many companies have predicted weaker earnings
and global lending markets remain troubled.
Worries that the dollar will remain weak as a result of further
US interest rate cuts are another factor behind the gold rush.
JP Morgan analysts forecast in a note to clients that gold
could reach between $950 and $975 this year.
"Precious metals is a very strong picture," said
Graham Birch, head of BlackRock's Natural Resources fund.
The rally was exacerbated by the suspension of production
at some of the world's biggest gold mines in South Africa,
after the country's state power supplier, Eskom, said it could
not guarantee supplies.
Eskom said the power crisis would last for four weeks, but
many observers expect the problems to persist for many years.