HomeNewsGold climbs to record above $1 910 amid growth fears

Gold climbs to record above $1 910 amid growth fears

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Spot gold soared to an all-time high above $1 910 on Tuesday, scoring a record top for a fourth consecutive session, as persistent worries about global economic growth burnished bullion’s safe-haven appeal.

The precious metal was headed for a seventh straight session of rise and a monthly gain of more than 16%, highest since September 1999.

Spot gold gained 0,8% to strike an unprecedented $1 911,46 an ounce, before easing to trade flat at $1 897,05 by 0626GMT.

US gold rose 1,4% to a record high of $1 917,90 and retraced to $1 900,80.

Investors are waiting for flash purchasing managers’ index (PMI) data for Germany, France and the eurozone later in the day, with a weak number likely to exacerbate fears about bailing out the bloc’s indebted peripheral states.

“We are not hearing much good news out of Europe or the United States,” said Darren Heathcote, head of trading at Investec Australia.

“The picture looks pretty bleak in the short term . . . For the time being investors are happy looking at gold as safe haven in these troubled times and will continue to do so until we see something positive and sustainable.”

On the chart, gold has been in the overbought territory since early August, with the Relative Strength Index hovering about 83.

Technical analysis suggested gold could pull back to $1 860 during the day, said Reuters market analyst Wang Tao.

The Shanghai Gold Exchanges said it will raise trading margins on three of its gold spot deferred contracts to 12% from 11% starting August 26, and widen the daily trading limits to 9% from 7%.

Shanghai gold T+D contract fell less than
two yuan from a high of 391,85 yuan per gramme at the news, but has since stabilised around 391 yuan, or $1 900,02 an ounce.

Traders are eyeing potential hikes in US gold futures margins. They were last raised on August 11 by 22%, triggering a correction in gold prices.

But concerns about the world’s economic growth soon offset the impact of the margin hike, and gold embarked on another leg of record-setting rally just a week later.

“Everyone says that gold has been rising too fast, beware, beware, beware!” said Ronald Leung, a physical dealer at Lee Cheong Gold Dealers in Hong Kong. “But there is no sign of gold prices turning to point south.”

Leung said scrap selling was minimal and sellers are waiting for higher prices, while investors continued to show buying interest.

Market participants are eyeing an annual central bank conference in Jackson Hole, Wyoming, where the US Federal Reserve chairman Ben Bernanke is scheduled to speak on Friday.

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