Publications
Partners
London - Gold hit record highs on Thursday as the dollar’s three-year low against a basket of major currencies attracted non-US investors, after the United States signalled it would retain accommodative monetary policy.
Spot gold ascended to a lifetime high of $1 534.30 per ounce, breaking records for the second straight session. It traded at $1 531.41/oz in afternoon trade, up from $1 526.40 late in New York on Wednesday.
The dollar index, a measure of the greenback’s strength against a basket of major currencies, dipped to a three-year low
after the US Federal Reserve signalled no rush to reverse low interest rates to support economic recovery.
The dollar held to losses after data showed US economic growth slowed more than expected in the first quarter, while
other data showed a rise in weekly US jobless claims.
Growth in gross domestic product - a measure of all goods and services produced within US borders - slowed to a 1.8% annual rate after a 3.1% fourth-quarter pace, the commerce department said. Economists had expected a 2% growth pace.
Output was also restrained by harsh winter weather, rising imports as well as the weakest government spending in more than 27 years.
"In the last few days the gold price has shown that its fully dependent on the US dollar and the US dollar seems to be relatively unimpressed by the US data coming out," said Commerzbank analyst Daniel Briesemann.
US gold futures also hit an all-time high at $1 535.1/oz and trimmed gains to $1 532.
The weakening dollar has been a key driver behind gold’s rally in recent weeks, alongside concerns over the ongoing crisis in the Middle East and North Africa region, sovereign debt problems in the eurozone and rising inflation worldwide.
"Everything is dollar-related and safe haven buying," said MKS Finance head of trading Afshin Nabavi.
"The Fed decision was not really a surprise; nothing has changed, but the tone of the statement from Bernanke left the impression that it is going to be a while before any rate hikes will be considered."
Physical buying
Physical gold buying was seen active in Asia while scrap selling was limited, as market participants remained bullish even after gold struck record highs in nine out of the past 10 sessions, dealers said.
Spot silver, which has rocketed more than 50% so far this year, rose to $48.45/oz against $47.76/oz late in New York on Wednesday.
US silver futures jumped as high as $48.75 in early trade, following a climb of as much as 7% on Wednesday. They were later at $48.38.
As silver prices advanced, holdings in the iShares Silver Trust, the world’s largest silver-backed exchange-traded fund, dipped 1.8% to 11 053.20 by April 27 from the previous session.
Gold and silver may both see more upside, but the risk of a pullback in silver is larger than in gold due to the more speculative nature of the silver market, traders said.
Spot gold ascended to a lifetime high of $1 534.30 per ounce, breaking records for the second straight session. It traded at $1 531.41/oz in afternoon trade, up from $1 526.40 late in New York on Wednesday.
The dollar index, a measure of the greenback’s strength against a basket of major currencies, dipped to a three-year low
after the US Federal Reserve signalled no rush to reverse low interest rates to support economic recovery.
The dollar held to losses after data showed US economic growth slowed more than expected in the first quarter, while
other data showed a rise in weekly US jobless claims.
Growth in gross domestic product - a measure of all goods and services produced within US borders - slowed to a 1.8% annual rate after a 3.1% fourth-quarter pace, the commerce department said. Economists had expected a 2% growth pace.
Output was also restrained by harsh winter weather, rising imports as well as the weakest government spending in more than 27 years.
"In the last few days the gold price has shown that its fully dependent on the US dollar and the US dollar seems to be relatively unimpressed by the US data coming out," said Commerzbank analyst Daniel Briesemann.
US gold futures also hit an all-time high at $1 535.1/oz and trimmed gains to $1 532.
The weakening dollar has been a key driver behind gold’s rally in recent weeks, alongside concerns over the ongoing crisis in the Middle East and North Africa region, sovereign debt problems in the eurozone and rising inflation worldwide.
"Everything is dollar-related and safe haven buying," said MKS Finance head of trading Afshin Nabavi.
"The Fed decision was not really a surprise; nothing has changed, but the tone of the statement from Bernanke left the impression that it is going to be a while before any rate hikes will be considered."
Physical buying
Physical gold buying was seen active in Asia while scrap selling was limited, as market participants remained bullish even after gold struck record highs in nine out of the past 10 sessions, dealers said.
Spot silver, which has rocketed more than 50% so far this year, rose to $48.45/oz against $47.76/oz late in New York on Wednesday.
US silver futures jumped as high as $48.75 in early trade, following a climb of as much as 7% on Wednesday. They were later at $48.38.
As silver prices advanced, holdings in the iShares Silver Trust, the world’s largest silver-backed exchange-traded fund, dipped 1.8% to 11 053.20 by April 27 from the previous session.
Gold and silver may both see more upside, but the risk of a pullback in silver is larger than in gold due to the more speculative nature of the silver market, traders said.
