Gold-price trading moved to its highest level this year as it approached a fresh 17-year high on Monday after pushing through the $450 a troy ounce level for the first in nine months. But it slipped back below this important psychological level.
Bullion attained a peak of $451.50 in Asia, a new high for 2005, as uncertainty about the outlook for the US dollar and interest rates provided support for the metal, which trades more in sync with the foreign exchange market than with the commodities market.
In late London trade, gold was at $448.70/$449.40 a troy ounce from New York’s late quote of $448.40/449.15 on Friday. However, the shift above $450 failed to break last December’s peak of $456.75 a troy ounce.
Gold prices have moved up since last week, when the World Gold Council, the industry body, reported record demand for gold jewellery in the year to June 2005. Prices are also supported by the fact that there will be no further selling for the rest of the year by central banks which have filled their annual quota under the European Central Bank Gold Agreement.
Other precious metals prices were led higher by gold’s example. Platinum hit a fresh three-year peak of $920 a troy ounce in Asian trade, before falling to $908/$912 in late London trade.
Alan Williamson, precious metals analyst at HSBC, said platinum prices were pushed in Asia by Japanese buying on the Tokyo Commodities Exchange, the world’s largest centre for platinum futures trading.
Mr Williamson said the latest data from the US showed that speculators held a net long position, a bet on rising prices, of 412,000 ounces, below the peak of 460,000 ounces, but well above the average of the past year of 240,000.
“At some point such heavy long positions on Nymex and Tocom will threaten the platinum price, but for the time being it is difficult to identify what the trigger to any long liquidation will be,” he said.
Oil fell more than $1.50 following steep declines in petroleum products prices as the release of emergency oil reserves last week helped overcome the supply shock in the aftermath of Hurricane Katrina.
IPE Brent for October delivery fell $1.61 to $61.23 a barrel in late afternoon London trade to its lowest level in five weeks, and down more than 11 per cent from its peak of $68.89 struck on August 30.
Nymex West Texas Intermediate for October delivery sunk $1.43 to $62.65 a barrel in early afternoon New York trade. October Nymex gasoline futures fell nearly 10 cents to $1.8625 a gallon and the October Nymex heating oil contract eased more than 8 cents to $1.8100 a gallon.