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Gold is a highly sought-after precious metal which, for many centuries, has been used as money, a store of value and in jewelry. The metal occurs as nuggets or grains in rocks, underground "veins" and in alluvial deposits. Modern industrial uses include dentistry and electronics, where gold has traditionally found use because of its good resistance to oxidative corrosion.
Gold Records All Time High, December Future Hits $1,038
After weeks of continued support the Gold price has finally broken through to trade at an all time high, Gold trading has continued to gain momentum throughout the session with futures making a record high of $1,038.
Today’s most recent rally breaks the previous record high of $1,033.20 which was set in March 2008. Investors now wait with baited breath to see if the gold market will find support here or whether prices will slip back as they did in 2008.
Today’s spiking Gold price has largely fed off the persistent decline of the US Dollar. In the current climate the US Dollar seems unable to avoid ‘bad press’ at the moment with the most recent debate causing a further sell off. The weak dollar has dominated commodity markets in recent months with Gold making a new all time high.
Speculation over the US Dollar’s position as the global reserve currency stepped up another gear this morning, following an exclusive report by the Independent. According to their sources, Gulf Arab states have been in discussions with Chinese and Russian finance ministers, with a view to creating an alternative pricing currency for oil trading.
This report adds to an emerging theme, with several separate instances where key economic policy makers have sparked query and speculation among commentators and investors alike. Last month World Bank President Robert Zoellick raised caution over the dollars prospects of maintaining its role as the primary reserve currency, highlighting the emergence of ‘other options’. Similarly the Chinese government has strategically discussed a sometimes conflicted view on its Reserve diversification.
Undoubtedly the US Dollar’s role in the global economic structure is under the microscope, however at such an early stage many feel as though the line between political posturing and actual intent will remain blurred for some time.
In the meantime the relative certainty of gold as a physical reserve is likely to persist. This morning the futures market continued to be buoyed by the weak dollar as investors flock to the yellow metal. Electronic trading on the New York Mercantile Exchange has been strong in Europe this morning as Comex future move within $10 of the all time highs. The December contract currently stands at $1,020 after trading within a whisker of $1,023 earlier today.
In London, Gold equities have benefitted from the overnight performance of the yellow metal, with investors getting behind many of the LSE’s gold plays. The diversified precious metals producer Petropavlovsk (LSE: POG) were the strongest performing stock in the sector, jumping nearly 10% to trade at £9.75.
International Gold producer Randgold Resources (LSE: RRS, NYSE: GOLD) rose more than 5%, gaining £2.21 to trade at £44.15 per share. While Canadian based producer Yamana Gold (LSE: YAU) gained almost 7% to reach £6.83.
Indonesia focused explorer Archipelago Resources (AIM: AR.) rose 14%. Philippines focused gold producer Medusa Mining (AIM & ASX:MML) were strong also, rising over 5%.
European Goldfields Limited (AIM & TSX: EGU) advanced over 6% after it announced the successful conclusion of the principal phase of the permitting process for its Skouries and Olympias Projects in Greece
Australian based Norseman Gold (AIM & ASX: NGL) gained 7%.
This morning Central China Goldfields (AIM: GGG) announced the appointment of their new Non-executive Chairman, Dr. Peter Antony Ruxton, its shares rose almost 2%.
Pan African Resources (AIM: PAF), Cluff Gold (AIM & TSX:CLF) and Centamin Egypt (AIM: CEY) were all positive also.
Elsewhere in Europe, Perth-based Gippsland Ltd (DB:GIX & ASX: GIP) shares were 56% higher at one stage following news it had received three new prospecting licences in the state of Eritrea, Africa.
