London (Platts)--3Jan2008
Gold continued to surge higher during London morning trade Thursday,
breaking through $865/oz and fixing above that level.
Spot bullion was bid at $866.95-867.40/oz at 1101 GMT Thursday, up $1.60
from its London morning fix and $10.85 higher than its late New York spot
price. Gold fixed at $846.75/oz during London afternoon trade on Wednesday.
Bulliondesk.com analyst James Moore noted in a morning report Thursday
that with $850 cleared, gold could quite easily find further upside momentum
as the background picture of geopolitical tensions and unstable financial
markets attracted safe-haven seeking investors.
"Resistance is expected at $860/875 and $890 in the coming sessions but
given the current climate gold could easily reach $900 before more substantial
resistance emerges," he said.
UBS said in a report Thursday that gold's clean break of the previous
all-time high of $850/oz, which dated back to 1980, raised concerns in some
camps that it was about to crash.
"Gold and the other precious metals have manifestly failed to correct
lower despite a lack of fundamental support from the jewellery market," said
UBS, adding that it was concerned that gold was vulnerable to a nasty
correction: "After all we consider the metal to be $100 to $150/oz above near
term fundamental value." But, the bank noted that this might not matter in the
near term following a decisive break of the previous all-time high.
"Accordingly, we raise our short-term forecasts for gold and now see the
metal at $900/oz in one month, much higher than our prior forecast of $750/oz.
We also raise our three month forecast to $800/oz reflecting our ongoing
concerns of the potential for a sharp correction at some point," said UBS.
Moore noted that silver had also taken momentum from gold as well from
strong investment inflows as the industrial precious metal hit a high of
$15.29 before settling at $15.17/oz on Wednesday. Silver was indicated at
$15.33-15.37/oz on Thursday at 1101 GMT. "Silver should look to target chart
resistance at $15.40/15.65 in the coming sessions," he added. Silver fixed at
$14.93/oz on Wednesday during London trade.
Meanwhile in the currency markets, the euro was at $1.4760 at 1101 GMT,
little changed from $1.4725 on Wednesday afternoon. The yen was at Yen 108.30
on Thursday morning, gaining against the dollar from Yen 109.70 on Wednesday
around 1600 GMT.
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