Date: Thu Dec 03 2009 - 20:40:46 EST
Gold taps more records, nears $1,225
Admin - Dec 02, 09
December 2, 2009 (MarketWatch) - Gold futures climbed to more record levels
in electronic trading Thursday in Asia, edging closer to $1,225 an ounce as
investment demand continued to strengthen.
"Gold continues to defy gravity and for good reasons: The shift out of fiat
currency such as the dollar is happening at a swifter pace than most
imagined it would," said Kevin Kerr, president of Kerr Trading
"We are hearing rumors that Germany will be coming in soon to purchase
gold, and while China is talking about gold being in a bubble, they are
most likely getting ready to increase their reserves from their tiny 2% of
reserves to at least 4% in gold," he said.
Gold for December delivery climbed as high as $1,224.70 an ounce on Globex,
yet another fresh record. It was up $11.50 at $1,223.50 by the early
afternoon in Tokyo.
December gold had earlier closed up $12.90, or 1.1%, at $1,212 an ounce in
Wednesday trading on the Comex division of the New York Mercantile
Gold futures on Comex have soared 37% this year, and have made gains in 17
out of the past 20 weeks. They advanced in all but two trading sessions in
"The most recent move in the gold price builds on the sharp rise that
started in November driven by the announcement that India will buy 200
metric tons ($7 billion) of [International Monetary Fund] gold," Daniel
Wills, senior analyst at ETF Securities said in a statement offered to
"Many market participants view this purchase as just the tip of the
iceberg, with China, Russia and other central banks also indicating their
intention to build up gold holdings as part of their strategy to diversify
away from the U.S. dollar," he said.
"Gold is being viewed as one of the primary alternatives to holding paper
currency, and the gold price has become a key barometer of investor
confidence in government policies," he said.
At the same time, Dubai's debt woes have helped spur the realization that
the danger for investors is not just that companies or banks could fail,
"but that eventually entire states/nations may be at risk on the ground of
escalating debt, escalating budget deficits," said Martin Hennecke,
associate director at Tyche Group Ltd.
Myra P. Saefong is MarketWatch's assistant global markets editor, based in
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