Wednesday, 6 April 2011

Gold hits record high on safe-haven demand

Wed, Apr 6 2011, 13:44 GMT
Gold reached a record high in trading today (April 6th) as the falling dollar and continued unrest in the Middle East and North Africa increased investor demand for safe haven assets.

According to the Guardian, the precious metal touched $1,458.80 per ounce in commodities trading, with the US dollar's slump largely responsible for the price.

Minutes from the Federal Reserve's interest rate deliberations last month revealed that an interest rate hike is unlikely in the near future, which put pressure on the greenback.

The spot gold price is being pushed up by the situation in Libya and fresh concerns over the state of eurozone debt, meaning those in commodity trading are likely to see demand for the metal remain healthy in the short term.

"Tensions in the Middle East and North Africa are not solved yet. Secondly, there are new uncertainties in the eurozone. These all will benefit gold," Ronald Leung, of Lee Cheong Gold Dealers, told the newspaper.

SEB Commodity Research analyst Bjarne Schieldrop made a similar point to the Associated Press, stating that while conflicts continue in oil producing nations, the gold price will remain high.

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