Gold reaches 25 year peak ... $600 target ...
Last Updated: Friday, 31 March 2006, 10:11 GMT 11:11 UK
Gold price reaches 25-year peak
Gold bullion
Gold, like silver, has been attracting investors
The price of gold has hit its highest level for 25 years, reaching more than $588 (£338) an ounce.
Investors believe that precious metals are a sound investment and could outperform stocks and bonds.
The price of spot gold rose to $588.70 an ounce before settling later on Thursday at $587.45.
Gold's performance mirrors rises by other precious metals. Silver saw its highest level in 22 years, while platinum reached an all-time high.
The price of gold has gone up by as much as $71.10 an ounce or just under 14%, since the end of 2005.
"Certainly, it looks like we are targeting $600 in the near term. It may happen in London overnight," said Darren Heathcoat, head of trading at N M Rothchild in Sydney.
Gold, like other precious metals, is appealing to investors who are concerned over unpredictable conditions in the Middle East, dollar instability and inflation.
Platinum hit an all time high of $1,095 an ounce, while palladium hit $355.80 an ounce, before settling at $350.30, its highest in four years.
'Contagion across metals'
"The funds have been very heavy buyers and there is a bit of technical buying as well... There has been a contagion across the metals," said Mr Heathcote.
Japanese investors are returning to precious metals as they think they can reap better rewards than from shares, dealers told Reuters.
Mining companies were buoyed by the gold price increase. Shares in Australia's Newcrest Mining rose 4.89%, while Lihir Gold rose 6.8%.
Strong demand in India and China, coupled with declining gold output in South Africa - a key bullion producer - has stirred the shortage and is maintaining high prices, said Elmer Stewart, president and chief operating officer at Canadian firm Alhambra Resources, which operates a gold mine in Kazakhstan.
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