PRECIOUS-Gold hits 3-mth high above $980/oz;
$1,000 eyed By Chikako Mogi -
1/06/2009 4:05:48 PM
*
Gold extends gains on weak dollar, inflation concerns
* Trader: $1,000 an ounce just a matter of time
* SPDR gold ETF holdings unchanged
TOKYO, June 1 (Reuters) - Gold hit a three-month high above
$980 per ounce on Monday, helped by a weak dollar and concerns
about rising prices after governments around the world boosted
spending to try to rescue their economies from the global
financial meltdown.
Other commodities such as oil have also extended gains on
a brighter economic outlook, another reason fanning fears
of medium- to long-term inflation, traders said.
Gold market reaction was muted to news that General Motors
Corp will file for bankruptcy protection on Monday, as traders
said this had been widely anticipated. [ID:nCARS1]
Spot gold rose 0.7 percent to $985.00 per ounce from New
York's notional close of $978.20 on Friday, adding to a rise
of more than $20 last week.
It earlier rose as high as $985.30, its highest since late
February.
U.S. gold futures for August delivery gained 0.7 percent
to a three-month high of $986.90 per ounce, from $980.30 an
ounce on Friday's settlement of the COMEX division of the
New York Mercantile Exchange.
"Gold is rising because the dollar is weak, the economy
is stabilising, and interest rates are low," said Ronald
Leung, director of Lee Cheong Gold Dealers in Hong Kong.
"There is too much hot money around as governments are
printing money, and one option is to put that into stocks
and the other is to gold," he said, adding that it was
just a matter of timing before gold prices rose above a key
$1,000 mark.
Gold rose to $1,005.40 on February 20, its highest since
a record peak of $1,030.80 in March 2008.
The dollar edged up against the euro after dropping steeply
on Friday. But the dollar hit a five-month low against a basket
of major currencies <.DXY> as investors bought higher-yielding
currencies and assets on hopes for a global economic recovery.
The dollar fell 0.1 percent against the yen. [USD/]
The dollar's weakness has supported gold as investors view
the metal as insurance against the falling value of dollar-denominated
portfolios.
Speculators boosted their holdings of U.S. gold futures,
with noncommercial investors net long on 177,308 contracts
of gold futures in the week to May 26, compared with a net
long 149,584 contracts in the week to May 19. [ID:nN29434339]
Investment flows into the world's largest gold-backed exchange-traded
fund, the SPDR Gold Trust , have remained unchanged since
May 22. [GOL/SPDR]
"People have already invested enough in the ETF,"
Leung said. Precious metals prices at 0527 GMT Metal Last
Change Pct chg YTD pct chg Turnover Spot Gold 984.95 6.75
+0.69 18.28 Spot Silver 15.91 0.17 +1.08 7.72 Spot Platinum
1215.00 28.00 +2.36 -20.07 Spot Palladium 235.50 1.50 +0.64
-36.01 TOCOM Gold 3029.00 10.00 +0.33 -1.01 46552 TOCOM Platinum
3754.00 115.00 +3.16 -29.69 17020 TOCOM Silver 485.00 11.30
+2.39 -10.35 395 TOCOM Palladium 735.00 7.00 +0.96 -45.60
272 Euro/Dollar 1.4133 Dollar/Yen 95.23 TOCOM prices in yen
per gram, except TOCOM silver which is priced in yen per 10
grams. Spot prices in $ per ounce. (Additional reporting by
Risa Maeda; Editing by Joseph Radford)