Gold tops $1,000 US an ounceGold tops $1,000 US an ounce
The price of an ounce of gold on Thursday topped $1,000 US for the first time, on a volatile day for world currency, commodity and equity markets.
Gold hit a peak of $1,001.50 US before pulling back a bit to trade at $994.10 US an ounce, a gain of $13.60 US from Wednesday's close.
The price of the precious metal has gained more than 20 per cent this year and has doubled in the last three years.
"This will likely become known as the 'Carlyle/Drake rally' (or cave-in, depending on your preference)," wrote Montreal gold analyst Jon Nadler, referring to the market-shaking woes of funds controlled by Washington-based Carlyle Group and New York-based Drake Management.
"The imminent doom of the bond fund and probable demise of the hedge fund sent icy shivers through the financial markets," Nadler, a senior analyst for Kitco Bullion Dealers, said in a morning commentary.
Gold is seen as a safe haven for investors looking for assets that will hold their value in times of steady drops in the worth of the U.S. dollar.
The U.S. currency hit a 12-year low against the Japanese yen and hit another record low against the euro Thursday.
Thursday's U.S. dollar drop was powered by news that a hedge fund of the giant Carlyle Group edged closer to collapse. The fund said late Wednesday that it expected creditors would move to liquidate the remainder of the fund, which has more than $16-billion US worth of residential mortgage-backed bonds.
Analysts say each revelation of further losses related to fallout from the U.S. subprime mortgage mess will likely force the U.S. dollar down more.
Many experts say the U.S. economy already appears to be in recession and that view was bolstered Thursday by news that U.S. retail sales in February fell from January's levels — another sign that U.S. consumers are pulling back on spending.
Canadian dollar driven up
The weakness in the U.S. dollar, combined with the strength in gold and oil prices, helped to boost the Canadian dollar by 0.53 of a cent to $1.0152 US.
Oil, which has recently been rising in tandem with gold, set another record high Thursday. It traded as high as $111 US a barrel.
Equity markets in North America, Europe and Asia were mostly in the red. The S&P/TSX composite index erased a triple-digit loss to trade up 20 points to 13,318 at 12:32 p.m. ET. The Dow Jones industrial average was down 68 points at 12,041, but up from its worse levels of the day.
Hong Kong's Hang Seng Index shed 4.8 per cent to at 22,301.64, while the Japan's Nikkei Stock Average gave up 3.3 per cent to close at 12,433.44 points.
European markets made some late day recoveries but still finished lower. In London, the FTSE-100 lost 1.23 per cent. Germany's DAX index shed 1.32 per cent, and France's CAC 40 was also off by 1.17 per cent.