Shanghai gold futures increase on int'l record
Updated: 2008-03-15 09:02
SHANGHAI: The record gold price in the international market has prompted Shanghai traders to predict further increases in coming months.
Gold briefly pushed past the psychologically important $1,000 mark on Thursday, as investors poured money into the metal to hedge against a tumbling dollar, soaring crude prices and a shaky US economy.
Gold's rally lifted other commodities, with silver, platinum and soybean futures all trading higher. Crude oil hit a trading record of $111 but fluctuated between gains and losses, while copper futures fell.
Growing unease about the US economy and the Federal Reserve's interest rate-cutting campaign has sent the greenback to record lows against the euro, boosting the allure of precious metals as a safe-haven investment.
The 15-nation euro hit a record $1.5625 in Thursday trading, topping the previous record of $1.5559 set on Wednesday.
Gold reacted swiftly to the dollar's fall, rising to $1,001.50 an ounce on the New York Mercantile Exchange, the highest ever. Traders later cashed in profits, leaving gold to settle at $993.80, still up $13.30 an ounce.
On the Shanghai Futures Exchange on Friday, the most actively traded gold futures contracted for delivery in June rose 0.74 percent on the day before to 227.87 yuan per gram ($999.5 per ounce).
The spot price for the most actively traded gold of A9995 purity on the Shanghai Gold Exchange rose 0.79 percent to 226.92 yuan per gram ($995.4 per ounce). It has risen a total of 2.4 percent in the past two weeks.
The spurt in gold prices has been widely attributed to the declining US dollar against most other major world currencies.
Li Jingyuan, an analyst at Haitong Futures Co in Shanghai, said: "When the US dollar is down, it makes sense for investors to rush to buy commodities, such as gold, oil or grain traded in that currency."
Wang Lixin, managing director of World Gold Council China, told China Daily: "The $1,000 level is just a starting line for a rally in the gold price."
Agencies contributed to the story
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