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| Thursday, 1 January 2004 |
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Gold hits highest price since 1996 Gold prices rose to a near-eight year high in London as a weak dollar coupled with the volatile effect of thin post-Christmas trading pushed the metal upwards. On the London Bullion Market the price of an ounce of gold stood at 413.50 at the morning fixing, up from 410.80 dollars on Wednesday, the last day of trading before Christmas. Monday's price was the highest since February 2, 1996, when gold hit 416.50 dollars per ounce at a fixing. A combination of thin trading and the weakening dollar had been behind the price rise, said Barclays Capital analyst Kamal Naqvie. "There is not a large liquidity given the time of the year. The number of traders is very small so it is not taking a huge amount to move this market," he said. "In the short term, we are still expecting euro strength and dollar weakness, which will be supportive for gold," he said. The dollar has fallen to a series of lowest-ever levels against the euro since mid-November due to concerns over the size of the US current account deficit and low American interest rates.On Monday morning the euro hit 1.2480 dollars, another best level since the single currency's launch in January 1999, while the pound rose to an 11-year high against the dollar. A weaker US unit makes dollar-traded gold more affordable to investors outside the United States, pushing prices upwards. Gold could push even higher soon, Naqvie added. "The short term remains positive and we are looking for a test of the 1996 high very early in the New Year, potentially within in the next few days," he said .- AFP |
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