Gold hits new 25-yr high over $604, silver surges

Discussion in 'General Discussion' started by martin97, Apr 17, 2006.

  1. martin97

    martin97 Fuel busted Trucker. Founding Member

    By Chikafumi Hodo

    TOKYO (Reuters) - Gold jumped to a new 25-year high above $604 per ounce on Monday as lingering concerns over Iran's nuclear aspirations and surges in the key U.S. crude price spurred active speculative buying.

    Silver rose as high as to $13.33 per ounce, the highest since May 1983, as speculators continued to buy on hopes of an imminent launch of the first silver exchange-traded fund.

    Surges of gold and silver futures on the Tokyo Commodity Exchange spilled to bolster dollar-based spot prices as both London and New York markets were closed for Easter holidays on Friday.

    "We all know both gold and silver prices are too high, but no long holders are willing to sell, while short holders were getting heavily squeezed," said Takashi Ogura, risk management section manager at Kanetsu Asset Management.

    "People don't want to go against the present bullish trend, so prices are surging," Ogura added.

    Spot gold rose as high as $605.70 an ounce -- the highest since December 1980.

    At 0314 GMT, gold <XAU=> was trading at $604.50/605.30, compared with Friday's late Asia level of around $599.30. It was at $596.10/596.90 in New York on Thursday.

    New York metals futures markets will reopen on Monday, while London precious metals markets will be closed until Tuesday.
    Key most-distant February contract on the Tokyo Commodity Exchange <0#JAU:> ended the morning session at 2,331 yen per gram, up 12 yen or 0.5 percent from Friday's close.

    Gold was supported by bullish U.S. oil futures, which leapt to $70 a barrel for the first time in seven and a half months on Monday. Gold is considered a hedge against inflation.

    Iran has expanded its uranium conversion facilities in Isfahan and reinforced its Nantanz enrichment plant, a U.S. think tank said over the weekend.

    This comes just days after U.S. magazine The New Yorker reported that the U.S. was exploring the option of using tactical nuclear weapons to knock out Iran's underground sites. Western powers fear Tehran may be covertly planning to build an atomic bomb.

    Still many traders were nervous about chasing gold and silver from current levels as they were unsure whether the current upward trend would be maintained even after participants fully return from the Easter holidays.

    "Rises in TOCOM silver and gold boosted spot prices, while many foreigners are watching today's rises very cautiously," said a senior trader at a Japanese trading house said.

    "Prices are sharply up but there are few players who are willing to take new positions from these high levels."

    Key most-distant February TOCOM silver rose more than 3 percent on active speculative buying, which helped lift the spot silver price.

    Silver <XAG=> was trading at $13.23/13.26, up from around $12.93 in late Asia on Friday and surpassing the previous 23-year high of $13.01 an ounce reached on April 11. It was at $12.77/12.80 in New York on Thursday.

    Both platinum and palladium rose in line with gains in silver and gold.

    Platinum was trading to $1,090/1,095 an ounce from $1,080 in late Asia on Friday. It was at $1,075/1,080 in late New York on Thursday.

    Palladium advanced to $350/357 an ounce from $344 in Asia on Friday. It was at $344/349 in New York on Thursday.

    Precious Metal Prices by 0317 GMT

    Last Net Change Pct Move

    Gold 604.50 6.50 +1.09

    Platinum 1090.00 13.00 +1.21

    Palladium 350.00 12.00 +3.55

    Silver 13.23 0.32 +2.48

    Change so far in 2006

    Metal Latest bid End prev year Pct Move

    Gold 604.50 517.20 +16.88

    Platinum 1090.00 968.00 +12.60

    Palladium 350.00 254.00 +37.80

    Silver 13.23 8.81 +50.17

    Can anyone with more knowledge of these markets shed some light on how this rise in metals affects the dollar, is this why gas is 3.00 a gallon?
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