IBT: Gold hits record above $1,174/oz as dollar slides
LONDON - Gold hit a record high at $1,1174 an ounce on Monday as dollar weakness pushed the metal through key technical resistance levels, fuelling momentum buying after the metal's sharp run higher earlier this month.
Spot gold was bid at $1,168.90 an ounce at 8:14 a.m. EST (1418 GMT), against $1,148.20 late in New York on Friday. U.S. gold futures for December delivery on the COMEX division of the New York Mercantile Exchange rose $22.50 to $1,169.30 an ounce.
"Gold has a lot of momentum. It is trading off the back of the dollar, and at the moment it seems to be outperforming that trade, as are a lot of other commodities," said Daniel Major, an analyst at RBS Global Banking & Markets.
The precious metal has rallied to a series of record highs since news that India bought 200 tons of gold from the IMF broke in early November. Since then a number of other central banks have announced they too are buying gold.
"The main supportive factor outside of the dollar has been various actions by central banks -- obviously the buying by India, and since then there has been Russia, and Mauritius," said Major.
The dollar fell broadly on Monday, sliding nearly 1 percent against a basket of six other currencies, after dovish comments from a U.S. Federal Reserve official reinforced the view that U.S. interest rates will stay low for an extended period.
Weakness in the U.S. unit boosts gold's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
Oil rose more than 2 percent to above $79 a barrel. Strong oil prices raise the metal's appeal as an inflation hedge. For a graphic on gold, oil and dollar's performance, click on:
