December 9, 2005 in Business

Gold price hits $519 per ounce

Associated Press
 

NEW YORK — Gold prices climbed again Thursday on fund-buying and speculation to a fresh 24-year high.

Spot gold rose $5 to settle at $519.30 an ounce Thursday on the New York Mercantile Exchange, after rising as high as $519.80. Spot gold is trading at levels not seen since 1981.

“The main feature is that the metals — and gold in particular — are seeing a tremendous amount of capital flow into them or related financial products,” said Dan Vaught, futures analyst with A.G. Edwards.

February gold futures, the most active gold contract, rose $4.90 to settle at $522.70 Thursday, after hitting a contract high of $523.90. March silver, the most-active silver contract, finished with a gain for the day of 11.3 cents to $8.99, after reaching a contract high of $9.

While the metals themselves soar, so are stocks for mining companies, Vaught said.

“It seems like any vehicle with a relatively high correlation with the gold market or precious metals is benefiting from this buying,” he said.

Buying interest has been especially strong on the Tokyo Commodity Exchange, traders said, encouraged by recent weakness in the Japanese yen. Gold is denominated in the U.S. dollar, so when the dollar strengthens versus the yen as it has in recent weeks, gold’s worth in yen increases.

Buying in gold and silver Thursday was further aided by moves in the euro and crude oil, Vaught said.

Gold traders do not appear “terribly concerned” about these other markets lately, he said, but when these other markets are moving in a direction that is traditionally supportive for gold, the market “is perfectly happy to respond in a bullish way.”

As gold was closing, the euro was trading up to around $1.1837, compared to $1.1723 late Wednesday. January crude oil was up 84 cents to $60.05.

© Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.


Thoughts and opinions on this story? Click here to comment >>

Get stories like this in a free daily email