Gold Over $400 an Ounce on Currency Moves

Dec. 1, 2003

LONDON (Reuters) - Gold jumped to its highest in more than 7-1/2-years above $400 an ounce in Europe on Monday as fund buyers took advantage of a strong euro/dollar rate and also dragged silver to a near-four-year high above $5.50.

The euro hit a lifetime high of $1.2041 against the battered dollar earlier on Monday and also rose to its highest in more than two months against the yen following the death of two Japanese diplomats in Iraq.

Spot gold closed at $397.45/398.15 in London after hitting a high of $401.40 -- approaching levels last seen in late February 1996. That compared with $397.75/398.50 at the London market close on Friday. The euro was at $1.1986.

Dealers said the gold market's move higher was exacerbated by thin conditions as U.S. players returned from a long Thanksgiving weekend.

Latest U.S. economic data were positive for silver, which was able to take advantage of its dual role as a precious and industrial metal. The metal shot up to a fresh 3-3/4 year high at $5.50/5.52 from $5.34/5.36 previously.

Spot platinum also moved higher again and was last quoted at $770.00/775.00 an ounce, compared with $763.00/768.00 in London late on Friday, while palladium eased a touch to $186.00/193.00 from $187.00/192.00.

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