Gold futures rose to a record closing price and silver topped $ 31 per ounce, extending a rally to the highest since 1980, as Europe’s sovereign-debt woes stimulated demand for precious metals as a haven.
Gold rallied 30 percent in 2010, the 10th straight annual gain and the largest annual advance since 2007. Last month, Moody’s Investors Service put the ratings on review for Greece and Spain and Ireland rank cut by five levels. Gold priced in British pound climbed to a record high today.
“I am bullish on gold this year, mainly because it is still a haven play,” said Park Jong Beom, a trader at Tong Yang Futures Trading Co. in Seoul. “The European debt crisis remains unresolved, and investors continue to benefit as a safe haven asset.”
Gold futures for February delivery rose $ 1.50, or 0.1 percent, to close at $ 1,422.90 an ounce at 1:51 pm on the Comex in New York, a record settlement. The all-time intraday high was $ 1,432.50 on December 7.
Silver futures for March delivery climbed 18.8 cents, or 0.6 percent, to $ 31,125. Earlier, the price reached $ 31,275, the highest for a most active contract since March 1980.
The Federal Reserve has kept U.S. borrowing costs low and purchased bonds to stimulate growth. Precious metals advanced as the European Union last year bought out Greece and Ireland. Holdings in exchange traded products backed by gold gained 17 percent in 2010.
“Fear of inflation ‘
Accommodative monetary policy will contribute to strengthening commodity, “said Matthew Zeman, a metals trader at LaSalle Futures Group in Chicago.
“All raw materials will benefit from the fear of future inflation, and investors will continue to accumulate in hard assets,” he said.
Last year, silver rose 84 percent, the most since 1979.
Earlier, gold fell as much as 0.5 percent and silver was down as much as 1 percent as a rally in U.S. stocks eroded the investment appeal of the metal. Bond yields also climbed.
“Certainly, gold and silver are not cheap at these prices,” said Leonard Kaplan, president of Prospector Asset Management in Evanston, Illinois. “The stock market will rally, and bond yields will go up, making commodities less attractive.”
Palladium futures for March delivery fell $ 2.90, or 0.4 percent, to $ 800.40 an ounce on the New York Mercantile Exchange.
Platinum futures for April delivery gained $ 8.20, or 0.5 percent, to $ 1,786.40 an ounce.
Last year, jumped 96 percent palladium and platinum was 21 percent.
source:blomberg
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