Rebecca Lawson - MINING NEWS STORY Tuesday, January 15, 2008
A FALLING United States dollar and bets that the country's Federal Reserve will cut interest rates in the near-term have pushed the gold price past the $US900 per ounce barrier.
Gold futures for February delivery on the COMEX division of the New York Mercantile Exchange (NYMEX) reached a record high of $US915.90 per ounce before closing at $903.40/oz,
Meanwhile the immediate delivery price reached a high of $913.90/oz before its last trade of $903.80/oz.
Fat Prophets analyst Gavin Wendt told MiningNews.net that gold will be the best-performing commodity of 2008 with the $US1000/oz mark not out of the question.
Wendt said the factors driving the gold price were all there including expectations of several interest rate cuts in the US likely to exacerbate the situation with respect to the US dollar.
"We're looking at a very, very positive impact on gold," he said.
Additionally Wendt said supply and demand fundamentals were playing its part with record levels of jewellery and investment demand, particularly from Asia and the Middle East, with the latter's oil nations using money derived from record oil prices to invest in gold rather than the sliding US dollar.
Meanwhile moves by the US Federal Reserve will be watched closely this year, as chairman Ben Bernanke's fight against inflation will have to come up against potential interest rate cuts, which Wendt said inevitably fans inflation.
While the US borders on recession, Wendt said Australia's economy will be fairly insulated as most of our exports are sent to China.
"We'll see increased volatility and there'll be hiccups along the way but we're fairly well off," Wendt said.
Gold stocks were capitalising on the rising gold price in the market this morning with gold miners Newcrest up 2.3% to $A39.36, Lihir Gold up 1.8% to $4.05 and Sino up 2.9% to $8.49 at time of writing.
Highest gold moving stock was Resolute Mining, up 6.3% to $2.03 followed by Barra Resources, up 5.5% to 38.5c and Avoca Resources climbed 5% to $2.50 at time of publishing.
KAL Price at posting:
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