GOLD BEING BOUGHT AS MONEY!!!Regards, DH
Gold hits 24-year high as traders rush to buy
LONDON (Reuters) — Gold fever took prices as high as $530.40 an ounce for the first time in nearly a quarter of a century Friday as investors, particularly in Asia, rushed to buy an asset that has gained over 16% in the past month.
"This buying is just more of the same of what we have been seeing. I suspect also that it may be central bank buying that is supporting it on the dips," Paul Merrick of RBC Capital Markets said.
"Gold's rally seems relentless and it feels as if it wants to continue higher" despite prices standing at technically overbought levels, said James Moore, an analyst at TheBullionDesk.com. (Investing column: Gold price glitters, but gather data nuggets before buying)
Spot gold rose $7.70 to settle at $527 an ounce on the New York Mercantile Exchange, after hitting a fresh 24-year high of $531 earlier Friday. The metal has soared roughly $75, or 16.4%, since Nov. 7.
February gold, the most active gold contract, rose $7.50 to settle at $530.20 an ounce, after climbing as high as $534.30.
Gold's tight supply, strong global demand, worries about inflation and growing fund interest in precious metals and other commodities have unleashed a wave of speculative buying, defying warnings that the market was overbought.
"The activity in the bullion market remains very impressive, with aggressive buying of any dips and a dearth of selling in the rallies helping to create a bullish chart pattern of higher lows and higher highs, thereby attracting more momentum-based fund buying," Alan Williamson of HSBC said.
Fund managers were buying as part of a strategy to diversify portfolios, while some investors were speculating about potential purchases from some of the word's central banks — previously longtime sellers.
A rise in oil prices, rekindling inflation concerns, and aggressive Japanese buying supported gold.
On Friday, U.S. crude briefly extended its rally to a five-week high above $61 a barrel and natural gas pushed deeper into record territory as a chill gripped the U.S. Northeast and Midwest, driving up heating fuel demand.
Because of its monetary use, gold moves on factors other than general supply and demand fundamentals, as is the case with commodities such as oil and soybeans, said Peter Schiff, president of Euro Pacific Capital.
"When gold is going up like this, that's telling you something," he said. "It's not just some other metal. Gold is being bought as money."
The price of gold has gained about 21% this year and has doubled in about five years.
Gold has risen all seven business days of December. At the session high, the market was up $35.60, or 7%, since its end-of-November price.
Contributing: The Associated Press