The pace of the gold price rally continued to accelerate on Monday, gaining almost $14 to a new near 25-year high of $540.90 a troy ounce, before easing in late European trading as some investors opted to take profits from the near $90 price rise in the past month.
At its peak on Monday, gold was at its highest level since January 1981, and the recent rise is one of the fastest seen in the current six-year gold price rally. Gold was trading at $536.70/$537.50 a troy ounce in late London trade, up from its late quote of $526.50/$527.20.
Japanese private investors are among the most active buyers of the precious metal, with most of the buying done on the Tokyo Commodity Exchange where the gold and all metal futures contract traded on the exchange ended up by their maximum amount allowable.
Tokyo gold futures rose by their maximum daily 50-yen limit for a second day on Monday to an 18-year high. Open interest, which is the amount of futures contracts bought and not sold, in Tocom gold stood at 533,769 contracts as of Monday, compared with just under 350,000 contracts a month earlier.
“There is an element of hysteria becoming evident in the market now, with perhaps retail greed beginning to replace fund strategic buying,” said Paul Merrick, vice-president of commodities at RBC Capital.
More US investors were betting on further gains in the gold price. The latest weekly trading data from the Commodity Futures Trading Commission showed an increase in the total net long speculative position, a bet on rising prices, on the Comex gold contract of 1m ounces on the week to about 19m ounces. This is close to the record high in mid-October.
Silver reached a new 18½-year high of $9.23 a troy ounce and platinum hit a fresh 26-year peak of $1,015 an ounce.
Oil prices jumped after the Organisation of the Petroleum Exporting Countries agreed to adhere to the oil cartel’s existing quotas of 28m barrels a day at its ministerial meeting in Kuwait City. Opec is producing about 28.2m b/d.
IPE Brent for January delivery shot up in late trade to close at $59.44 a barrel, up $2.13, by the close in London. January Nymex West Texas Intermediate gained $1.91 to settle at $61.30 a barrel in New York
Ministers said that the Opec decision paved the way for a possible cut in output in early 2006. The cartel will meet again on January 31 in Vienna.
Raw sugar futures rose to 14.06 cents a pound on the New York Board of Trade, their highest level in 10½-years.
Refined sugar prices hit a nine-year high of $341 a tonne, the highest since September 1996.
