Gold hits another high as US dollar suffers
Singapore, November 9, 2009
Gold powered to another record high on Monday on safe-haven buying as the US dollar slipped and after a weaker-than-expected US unemployment rate revived worries about the health of the global economy.
Gold has gained more than 25 percent in 2009, driven by persistent weakness in the US currency that has lost more than 6 percent versus the euro so far this year, and recently by the failure of a meeting of the Group of 20 finance officials to talk more specifically about the dollar's decline.
As expectations rise that central banks across the globe might look to buy gold to diversify their reserves, analysts say that there could be more upside for the precious metal.
'The fundamental outlook for gold remains favourable,' Credit Suisse said in a research report.
Cash gold hit a high of $1,104.80 an ounce, surpassing Friday's lifetime high of $1,100.90, with a jump in oil prices and India's recent purchase of IMF gold adding to the bullish sentiment.
US December gold futures jumped as high as $1,105.4 an ounce to another lifetime high.
'When you look at the RSI on a 14-day basis, it's still in a positive story because it's not overly bought. So, there's potential for further upside,' said Mark Pervan, ANZ's senior commodities analyst.
'It could move up quite strongly as we haven't any key resistance level in place,' he added.
The dollar index slipped 0.23 percent to 75.646, while the euro edged up to $1.4870, with a statement from the IMF that the dollar remained on the 'strong side' despite a recent sell-off spurring another bout of selling in Asia.
US employers cut 190,000 jobs in October, greater than the 175,000 fewer jobs forecast, and the unemployment rate rose to 10.2 percent, a 26-1/2-year high that was above average forecasts of a 9.9 percent rate. -Reuters