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Gold hits record high, silver at new 31-year peak
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Published on 6 Apr. 2011 10:59 PM IST
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LONDON, APR 6 : Gold rallied to a second successive record high on Wednesday, powered by a slide in the dollar and by ongoing investor demand for safe-haven assets, while silver hit fresh 31-year peaks.
Unrest across the Arab world and unease over the euro zone’s debt finances are encouraging inflows of cash into gold, which has risen by more than 2 percent this week, stated Zee News.
This has more than offset the potentially damaging impact of China’s latest increase in interest rates and a less pessimistic take on the US economy from the Federal Reserve.
The focus this week is on Thursday’s three central bank policy meetings, at which the European Central Bank is almost guaranteed to raise rates, thereby boosting the euro against the dollar, while the Bank of Japan and the Bank of England are expected to hold their fire.
Spot gold was last up 0.4 percent at USD 1,456.25 an ounce by 0834 GMT, having hit an all-time high of USD 1,458.80 earlier in the day. Gold has rallied by more than 5 percent in the past three weeks.
COMEX June gold futures were last up 0.4 percent at USD 1,457.80, having touched a contract high of USD 1,460.00.
“Six months from here, we think (the strength) is sustainable for both gold and silver, but I wouldn’t be surprised if we see a short-term pullback because a lot of this is driven by the euro, which is pretty strong against the dollar,” said Standard Bank analyst Walter de Wet.
The dollar fell to 14-month lows against the euro, which rallied to an 11-month peak against the yen ahead of the first rate rise from the ECB since July 2008 to tackle rising inflation pressures.

 
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