Thursday, Oct 30, 2008
Gold rose for a fourth straight day to near a 1-week high on Thursday on safe-haven buying after oil extended gains and the U.S. dollar posted its biggest one-day drop in 23 years.
Firmer equities also lifted gold and other precious metals, with silver and palladium rising to their highest in two weeks and platinum hitting a 1-week high. The U.S. Federal Reserve cut interest rates by half a percentage point on Wednesday, sending the U.S. dollar tumbling.
Thursday’s third-quarter U.S. GDP data, expected to show the economy contracted by 0.5 percent, could also set the direction for precious metals.
Gold was trading at $765.50 an ounce, up $11.20 an ounce from New York’s notional close on Wednesday, when it hit an intraday high of $773.40 an ounce.
(Article continues below)
But is still down nearly 12 percent since the start of the month, on track for its biggest monthly decline since 1983, as an earlier rush for safe-haven assets gave way to a cross-commodity sell-off by investors scrambling for cash.
- A d v e r t i s e m e n t
Gold plummeted to its weakest in 13 months at $680.80 on Friday, but has rallied since then along with a recovery in other commodity markets, raising hope that the worst may be behind.
“I think all the preconditions are there for gold to take a very healthy run. The physical demand for gold has actually exceeded the ability to supply right around the world,” said Ian Smith, managing director of Newcrest Mining Ltd , Australia’s largest gold producer.