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Gold Keeps Rising!
Gold in New York rose to the highest in almost 18 years on investor demand for alternatives to U.S. and European currencies, stocks and bonds, ending the day at $486.10.
Investment in gold rose 56 percent to 118 tons in the third quarter from a year earlier, the producer-funded World Gold Council said today. Investment in exchange-traded funds climbed to 38 tons, compared with a net decline of 2 tons a year earlier, the council said. Gold sold in dollars has rallied 3.6 percent this week, even as the U.S. currency approached a two-year high against the euro.
``Europe doesn't look terribly attractive and the U.S. still has the current account-deficit problem,'' said Tom Boustead, an analyst for Refco Inc. in New York. ``That forces interest in hard assets, and investors are gravitating toward gold.''
Gold for December delivery rose $7, or 1.5 percent, to $486.10 an ounce at 10:53 a.m. on the Comex division of the New York Mercantile Exchange. Prices earlier reached $487.80, the highest since January 1988. A futures contract is an obligation to sell or buy a commodity at a set price by a specific date.
Gold consumption by jewelers and investors was 838 metric tons in the third quarter, up 7.6 percent from a year earlier, the London-based World Gold Council said. Jewelry demand accounts for 73 percent of gold consumption.
Gold has gained 11 percent this year, and the Standard & Poor's 500 Index has climbed 1.9 percent. U.S. Treasuries have returned 1.7 percent, heading for the worst annual performance since 1999, according to Merrill Lynch & Co. data.
Investment-grade corporate bonds have gained 0.9 percent this year, including reinvested interest payments. They are also poised for the worst year since 1999, Merrill data showed. Junk bonds in the U.S. have risen 1 percent in 2005, the worst since 2002.
