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Join Date: 03 Nov 2010
Location:  KuwaitPosts: 139 |
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Gold and silver at fresh peaks |
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London: Silver hit multi-year peaks on Monday, driven by pent-up demand on the first trading day of 2011, while gold rose above $1,420 (Dh5,211) an ounce in Europe yesterday, within 1 per cent of its record high.
While a firm dollar limited gains, expectations for more bad news on Eurozone debt, concerns over potential inflation in developing economies and an increased focus on the US deficit are set to maintain surging demand for precious metals, analysts said. Pradeep Unni, a senior analyst at Richcomm Global Services in Dubai, said fresh highs in gold were likely this year, with an initial target seen at $1,455-$1,480, after trade in the metal was becalmed over the Christmas holidays. "The fundamentals are driving the price, and those fundamentals remain fear-driven," he said. "Gold [steps] into the New Year with all its current fundamentals intact ... sovereign debt risk, macro uncertainty, concerns over currency stability, medium-term inflation fears as the US Federal Reserve implements Quantitative Easing II, geopolitical tensions and low interest rates." Silver — as well as palladium — were among the best-performing precious metals last year, up 97 per cent and 83 per cent respectively. Autocatalyst metal palladium is seen as the surer bet for 2011, however, on expectations its market balance will tighten. "At over $31 a troy ounce at the beginning of the new year, silver... continues its high-altitude flight," said Commerzbank in a note. "Ongoing strong demand, e.g. for silver ETFs [exchange-traded funds], could push the price up further. Alone the world's largest silver ETF, iShares Silver Trust, increased its holdings last year by 15 per cent or 1,429 to 10,922 tonnes." Spot gold was bid at $1,420.10 an ounce at 1230 GMT, against $1,419.45 late in New York on Friday. The precious metal had hit a record $1,430.95 an ounce in December. US gold futures for February delivery eased 50 cents an ounce to $1,420.90. The euro fell 0.5 per cent against the dollar early in the day, reversing year-end gains on persistent concerns about euro zone debt. These worries can work both ways for gold. A weaker euro, and consequently stronger dollar, typically pressures gold prices, but concerns over sovereign debt are set to support demand for the metal as a haven from risk. UAE among top five An analytical study issued by the Ministry of Foreign Trade yesterday has confirmed that the UAE is among the world's top five gold traders from 2005 - 2009 in both imports and exports of the commodity. The study revealed that the UAE ranked third in exports and the second in imports in 2009. The value of UAE imports of gold amounted to $14.5 billion in 2009, a 10 per cent increase from 2008. |
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