Gold Hits Five-Year High as Dollar Reels

December 17, 2002
By Steven Swindells

LONDON (Reuters) - Gold hit its highest level in more than 5-1/2 years Tuesday as weakness in the dollar, rallying oil prices and fears of a war with Iraq opened the gates for a flood of fund money into the safe-haven asset.

Spot gold hit a high of $341.25 an ounce, its firmest level for the metal since June 1997 and a 1.5 percent gain from closing levels in New York Monday.

"The slump in the dollar has caused gold to spike upwards to $340 overnight, with the sharp jump in oil prices and heightened fears of a war with Iraq adding to the bullish sentiment," said Lawrence Eagles, analyst at commodities trader GNI.

"Historically when gold performs like this it tends to keep going," Eagles said.

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