AFP/New York
Gold surged to a new record high price of $1,085.07 an ounce yesterday, a day after an announcement of a massive sale of gold by the International Monetary Fund to India.
Prices in London hit $1,085.07 per troy ounce and New York prices reached $1,084.70, breaking records set last month.
The latest surge came a day after the International Monetary Fund announced it sold 200 tonnes of gold to India’s central bank over a two-week period last month for a total of $6.7bn to bolster its finances.
Although an IMF gold sale had been flagged for some time, it lifted some uncertainty from the market by helping soak up potential supply.
“The market is managing to decouple from the dollar on the news from the IMF — which begs the question: they’ve sold half of the 400 tonnes they have in this off-market transaction, will be they able to sell the balance to other central banks?” said Robin Bhar, metals analyst at Calyon.
“I think the market is hoping that another announcement will be made for the balance,” he added.
US traders said the gold market was finding support from potential for accelerated producer buybacks as miners are keen to back gold they had previously sold forward.
Miners Anglogold Ashanti and Barrick gold both said on Monday that closure of their hedgebooks might happen ahead of schedule.
AngloGold Ashanti said it may accelerate closing its hedgebook if conditions are right., while Barrick, the world’s biggest miner of the precious metal, said it may complete the planned closure of its hedgebook before the end of the 12-month window.
The dollar hit a one-month high against a currency basket yesterday as investors retreated from risk assets, before paring those gains.
A strong dollar makes gold and other commodities priced in the US unit less attractive for non-US investors but gold bucked the trend.
“Gold is gold, people love it. Whether it’s rational or not, is another thing,” said Stephen Briggs, commodity strategist at RBS. “This has quite clearly broken away from the relationship with the dollar.
“We wouldn’t be surprised to see $1,100. It’s gone up $25 in the space of half an hour, so how can one say?” |
