Gold climbs to new 25-year high

[notiCIas]

Gold climbs to new 25-year high

Geopolitical fears, economic uncertainty and energy prices drive up price of commodity to $568.50.

January 20, 2006: 11:54 AM EST


NEW YORK (Reuters) - U.S. gold futures rallied to a new 25-year peak Friday morning amid continued fund buying fueled by geopolitical concerns, high energy prices and uncertainty about the economy, sources said.

"We busted through some key technical levels today with $565.50 being a previous overnight high, so on the sell-side all the offers just dried up. I'm looking for $570 by the end of the day," said one COMEX floor dealer.


By 10:52 a.m. EST, gold for February delivery was up $3.00 at $562.00 an ounce at the New York Mercantile Exchange's COMEX division, after spiking to a new 25-year peak at $568.50, which bested the previous peak hit on Tuesday in ACCESS electronic trading at $565.50.

COMEX gold volume at 10:00 a.m. EST was estimated at 55,000 lots.

Gold futures rallied 2.66 percent on Thursday following a report from Al Jazeera TV that Osama bin Laden warned that al Qaeda was preparing new attacks inside the United States.

U.S. intelligence analysts authenticated the tape as a message from bin Laden, a CIA official in Washington said Thursday.

"In any geopolitical tension environment you're going to have people that are going to take their money away from the market and traditionally they would move it to cash, but I think what they are doing now they are seeing the dollar decline and are deciding to move it into gold, which has been moving higher," said Emanuel Balarie, senior market strategist with Wisdom Financial.

"I think a lot more people are starting to view gold as a currency of sorts and realize that in this uncertain geopolitical environment, they are fleeing to something that has always been a historical safe haven," Balarie added.

Adding fuel to the geopolitical uncertainty was news that Iran, which could face U.N. sanctions over its atomic program, had started to transfer assets held in foreign accounts.

Spot gold was firmer at $562.90/563.70 an ounce in early New York trade, compared with Thursday's close at $557.70/558.505.

Friday's early London fix by bullion dealers was at $559.25.

COMEX March silver futures were trading up 3.20 cents at $9.140, moving between $9.070 and $9.275.

Spot silver was last at $9.06/9.09 an ounce, down slightly from its last New York finish at $9.07/9.10. It was fixed at $9.08 an ounce.

In platinum, NYMEX April futures were $3.30 firmer at $1,050 an ounce, within a couple of dollars of Tuesday's 26-year high at $1,059.

NYMEX platinum hit an all-time peak of $1,189.50 an ounce on March 5, 1980.

Spot platinum was last at $1,048/1052.

March palladium increased $5.35 to $283 an ounce. Spot palladium fetched $277/281.