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Gold, platinum hit records
as dollar weakens, jitters linger
Thomson
Financial
Friday January 25, 2008
Gold surged to a record above 920 usd per ounce
as the dollar weakened overnight, oil prices rose, financial jitters
lingered and as mine stoppages in key producer South Africa sparked
supply concerns.
Higher stock markets in Asia and London after Wall Street made
gains yesterday also boosted sentiment, even though in the longer
term major worries over the global economy remain.
Bullion trades in the opposite direction to the US dollar as
it is seen as an alternative asset and in line with oil prices
because gold acts as an inflation hedge.
(Article continues below)
Wider financial concerns and worries the US is headed for recession,
meanwhile, boosted gold's appeal as a safe store of value.
On the supply side, meanwhile, Africa's biggest producers AngloGold
Ashanti (NYSE:AU) , Harmony and Gold Fields have stopped output
because of a power shortage.
The companies halted underground operations on worries that power
cuts could trap miners, after the national power utility Eskom
said it could not guarantee to supply their operations.
'Gold looks set to extend higher in the coming sessions as investors
seek further safe-haven protection. In addition following the
recent period of consolidation/correction the metal is well placed
technically to move higher with RSI at 67 suggesting a target
around 955-960,' said TheBullionDesk.Com analyst James Moore.
Investors are also rushing to buy gold, which last year rose
by around 30 pct, ahead of the US Federal Reserve's Jan 30 meeting.
The central bank is expected to cut interest rates again after
it made an emergency 75 basis-point intra-meeting cut earlier
this week.
Such a move would likely weaken the dollar further and therefore
boost gold buying. Also, some market players might see another
rate cut as the Fed's recognition that such drastic measures are
needed to calm the ailing US economy, which would also spark investment
into gold as a safe store of value.
'We continue to see further upside for the yellow metal today,
with equities on the rebound,' said Standard Bank analyst Walter
De Wet. But, he warned that 'the risk could lie in the belief
that the Fed would not cut rates as aggressively as initially
thought at the end of the month.' Some players, who had tipped
the Fed to cut by 75 basis points next week have scaled back those
expectations and now reckon 50 basis points is more likely.
Full
article here.
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INFOWARS:
BECAUSE THERE'S A WAR ON FOR YOUR MIND
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