Ailing Dollar Keeps Gold Near 8-Year High

Dec 30, 2003
By Kevin Morrison

Gold hit another near eight year high on Tuesday as the US dollar remained near record lows against the euro, and moved within a dollar of reaching a fresh 13 year high.

Spot gold peaked at $416.75 a troy ounce, its highest level since February 1996 when it reached $417.70. The morning gold fix was $415.60.

Gold prices have risen more than 20 per cent this year, mainly due to the US dollar woes.

The renewed investor interest in gold has been highlighted by the popularity of new gold investment products from the World Gold Council, the industry body funded by gold miners. The council's Gold Bullion Securities products in the UK holds 23 tonnes since its launch three weeks ago. This is about a quarter of all gold bought by investors in 2002.

Silver was fixed at $5.91 a troy ounce in London, its highest fix since May 1998.

Crude futures prices firmed. IPE Brent for February delivery added 29 cents to $29.60 a barrel in early morning London trade, extending the 25 cent gain from Monday. February Nymex WTI gained 19 cents to $32.59 a barrel, partially reversing its 46 cent slide from the previous session.

Reuters reported that the Chicago Mercantile Exchange would expand the daily trading limit in the December live cattle contract by another 2.50 cents if the current 5 cents a pound is either bid or offered during the day.

US cattle futures prices fell the daily limit at the CME for the third consecutive session on Monday. CME live cattle for delivery in December through April 2004 all closed down the allowable 5-cent per pound daily trading limit on Monday. The limit was expanded from 3 cents on Friday. Trading in CME cattle options on Monday indicated the February live cattle contract could eventually drop to 77 cents.

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