Nov. 17, 2004
Gold Eagle
LONDON, Nov 17 - Buoyant gold forged higher in Europe on Wednesday, hitting fresh 16-1/4 year highs for the fourth day running, as dollar weakness paved the way for bullion to step up to $450 an ounce.
Gold's three-year bull run has picked up pace this year thanks mainly to the weak dollar, although heightened geopolitical tension has also played an important role.
A wider array of investors have also poured money into the commodities arena as the raw materials sector has outperformed more traditional asset classes such as equities and bonds.
"The interest this year for gold across the world has certainly increased significantly," Frederic Panizzutti, senior vice president at MKS Finance said.
Spot gold gained just over half a percent in early trade to score its highest since July 1988, indicated at $442.50/443.00 a troy ounce by 0912 GMT, up from New York's late quote on Tuesday of $439.75/440.50.
"$445 seems to be the target for the time being and we're pretty close to that already," one trader said.
"I am almost sure we are going to reach that this week and maybe $450 by the end of the year."
Gold is up nearly 75 percent from a near 20-year low in 2001, when it slumped under the weight of forward selling from producers and central banks liquidating their gold reserves.
But miners have now changed tack and have been buying back their gold sales contracts, while 15 European central banks signed a pact to limit their sales.
"We stick with our view that gold will reach $450 before the year is out."
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