Graeme Wearden, The Guardian
October 8, 2009
Investors are continuing to move into gold to hedge themselves against the weakness of the dollar
Gold has hit a new all-time high for the third day running, clearing the $1,050 per ounce mark for the first time as the US dollar continued to lose ground in the currency markets.
The spot price of gold reached $1,058.2 this morning, with the futures contract for delivery in December hitting $1,059.6.
Traders said that investors are continuing to move into gold to hedge themselves against the weakness of the dollar. The greenback has been sliding since Tuesday morning, following reports of plans to use a new basket of currencies for oil trading.
Some analysts believe that gold — seen as a safe haven against inflation and economic turmoil — could climb much higher. Yesterday Barclays Capital predicted that it could make “a run at $1,500″.
Today the dollar was at its lowest point for two weeks, measured against a basket of other currencies. It fell to $1.6010 against the pound, while in Hong Kong the central bank was forced to sell HK$2.325bn (Ãƒâ€šÃ‚Â£186m) and buy US dollars to prevent the Hong Kong dollar breaking out of its agreed trading band.
Sentiment against the dollar was not helped by the Congressional Budget Office estimating that the US deficit hit a record of $1.4tn (Ãƒâ€šÃ‚Â£871bn) for the 2009 fiscal year. This is three times as large as last year’s record of $459bn, and equal to almost 10% of US GDP.
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