Gold, Platinum and Silver Approach New Highs

November 29, 2005

Gold, Platinum and Silver Approach New Highs

Gold and platinum moved close to the key psychological levels of $500 and $1,000 an ounce respectively but fell away in late trade on Nov. 28, reports the Financial Times of London. However, they are poised to make another strike at these levels this week.

Gold rose to $498.75 a troy ounce, its highest level since December 1987 – the last time it topped the $500 mark – before easing to $496.70/$497.40 in late London trade. It was still up more than $1 on the day.

Gold held above $500 for just one day in December 1987, while in February 1983 it managed a few attempts, peaking at $509, before falling to $340 by the end of that year.

Paul Merrick, vice president commodities and foreign exchange at RBC Capital, said current strong fundamentals and insatiable investor demand made a repeat of this price action unlikely in 2006. "Today's strength has again been built on Japanese investors, keen to diversify away from stocks, bonds and currencies," he said.

Gold has risen in all significant currencies this year, as it has decoupled from traditional role as a negative correlation to the dollar.

Platinum prices hit a 26-year high of $998 a troy ounce, its highest level since January 1980, before settling at $989/$993 in late trade, up $3 on the day.

Silver rose to a 20-month high of $8.27, and would need to rise another 20 cents to make new 18-year highs.

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