Dec. 1, 2004
YAHOO FINANCE
NEW YORK, Dec 1 (Reuters) - U.S. gold futures climbed to within sight of recent 16-year highs on Wednesday morning after the dollar hit an all-time low versus the euro, while fund and trade buying lifted silver prices to an eight-month peak.
The precious metals have been drawing in investors due to the eroding value of the U.S. currency, while high oil prices and increased geopolitical tensions have triggered buying as well, dealers and analysts said.
Gold touched $457 an ounce on Tuesday, which was its highest since July 1988, and has remained close to that level since then.
"It's a dollar thing," said a broker at a futures commission merchant in New York. "As long as the dollar is down, gold will stay up."
Frank Aburto, trader at F.C. Stone, said silver piggybacked on gold's rise Wednesday, and was lifted by renewed fund and commercial buying in the market.
"With the gold above the $450 level it is attracting some good interest to silver, which has been neglected," he said.
Gold for February delivery on the New York Mercantile Exchange's COMEX division rose $3 to $456.20 an ounce by 10:25 a.m. EST (1525 GMT), trading from $452.40 to $456.50.
COMEX spot December gold was up $2.10 at $453.40.
Previous end-of-the-month profit-taking, fueled by the market's top-heavy net long position, fizzled out overnight, paving the way for fresh speculative buying and physical interest at lower prices, dealers said.
Additionally, a lower dollar was boosting gold as the dollar-denominated metal was getting more affordable for non-U.S. buyers.
The dollar was not far off a fresh all-time low against the euro at midmorning.
The greenback has lost almost a tenth of its value versus a basket of currencies in four months on concerns about the U.S. current account deficit and speculation Washington is happy to see a weaker dollar.
The euro was worth $1.3320, close to the high at $1.3335.
Analysts said they viewed resistance in COMEX February gold at $460 and support down at $450 and $448.20.
Spot gold priced at $453.25/4.55, way above Tuesday's New York close at $450.50/1.25. Wednesday's early fix in London was at $451.10.
In silver, a mixture of fund, trade and bank buying catapulted prices to their highest since April, floor brokers said.
COMEX March futures rose 20.3 cents to $7.98 an ounce, moving from $7.76 to $7.985. Spot silver jumped to $7.90/93 from $7.68/71 previously. The London fix was lower at $7.715.
NYMEX January platinum rose $2.50 to $874.80 an ounce. Spot platinum traded to $867.00/872.00.
March palladium advanced $2.40 at $215.50. Spot palladium touched $209.00/213.00.
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