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Gold hits record high as dollar falls vs euro
Published on 13 Oct. 2009 11:45 PM IST
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Gold hit a record $1,065.25 an ounce in Europe on Tuesday as the dollar fell to day lows versus the euro, fuelling interest in bullion as an alternative asset. A rise in oil prices to nearly $74 a barrel and a recovery in physical demand for gold after a sluggish year for the jewellery market are also helping lift the metal, analysts said. Spot gold was bid at $1,062.55 an ounce at 0957 GMT against $1,055.25 late in New York on Monday. It has rallied 12 percent since the beginning of September and hit record highs for three consecutive sessions last week. “Point to whatever you like -- strong crude prices, surging softs, EUR/USD poised to break higher, approach of the full moon tomorrow -- (gold) just doesn’t want to go down,” said Tom Kendall, precious metals strategist at Mitsubishi Corp. US gold futures for December delivery on the COMEX division of the New York Mercantile Exchange rose $6.50 to $1,064.00. They also touched a record at $1,066.70 earlier. Gold prices jumped in line with a spike in the euro versus the dollar to session highs. The single currency broke above $1.48 in early European trade. Currency and equity traders are awaiting the release of US corporate results later in the week for clues as to the future direction of trade. On the wider markets, European shares turned positive after easing in early trade. Oil also rose close to $74 a barrel. Strength in crude prices often benefits gold, both because it boosts interest in commodities as an asset class and as the precious metal can be bought as a hedge against oil-led inflation. Gold enthusiasts are also taking heart from a pick-up in demand for gold jewellery in India, the world’s largest bullion consumer last year, after an extremely sluggish year. Last-minute purchases ahead of the key Diwali festival this month are keeping premiums steady, dealers said. However, more gold scrap is also coming into the Asian market has prices rise, they said.

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