Business | Markets
Gold tops record $1,100
Prospect of central banks buying precious metal adds buoyancy
- Reuters
- Published: 00:00 November 7, 2009
London: Gold surged to a record high above $1,100 (Dh4,041) per ounce yesterday as investors pounced on the metal in volatile trade after data showed US employers cut a bigger-than-expected 190,000 jobs in October.
Dealers also said the market continued to find residual support from the prospect of central bank buying of gold to diversify their reserves.
"The market has the bit between their teeth — all these investors have piled into gold in a quasi-physical sense and now they are being supported in that by the actions of Mr Central Bank," said RBS metals analyst Stephen Briggs.
Focus on demand
The precious metal hit a record high at $1,100.90 per ounce earlier, having gained more than 25 per cent this year. By 1514GMT, it was bid at $1,097 a troy ounce from $1,089.55 late in New York on Thursday.
The trigger for the surge last week was news that the International Monetary Fund had sold 200 tonnes of gold to the Reserve Bank of India for $6.7 billion.
"People are focusing on pent-up demand for gold from central banks in emerging markets," said Michael Lewis, head of commodities research at Deutsche Bank.
"The central bank community for the first time in 20 years is possibly going to be a net buyer of gold having been a net seller since 1988," he said.
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