Gold at all-time high

In yesterday morning trading on the London Bullion Market, gold struck US$1,048.43 an ounce, which was the highest level in history.

The S&P GSCI Index of 24 raw materials climbed for a third day, led by gains in energy and grains. When gold passed US$1,000 in February, sales of scrap metal sent prices down as much as 16 percent in less than two months.

"We're seeing no selling," Frederic Panizzutti, senior vice president of refiner MKS Finance SA, said in a phone interview from Ho Chi Minh City, Vietnam. "I would not be surprised to see US$1,100 by the end of the year."

Gold futures jumped as much as US$10, or 1 percent, to a record US$1,049.70 an ounce on the Comex division of the New York Mercantile Exchange and were at US$1,042.90 as of 8:30 a.m. local time. Gold for immediate delivery rose as much as US$6.33, or 0.6 percent, to US$1,048.43 an ounce in London and recently traded at US$1,041.52. Spot prices are up 18 percent this year, heading for a ninth consecutive advance.

The price of gold in the morning "fixing," used by some mining companies to sell production, rose to a record US$1,047 an ounce from yesterday's afternoon record fixing of US$1,038.75 an ounce.

Should gold for immediate delivery climb to more than US$1,050 an ounce, the metal may extend gains as investors buy contracts to close short positions, or bets on falling prices, Panizzutti said.

Hours and Weeks

It "may trigger some short-covering and option hedge- related buying," he said. "Everything is going to happen between the coming hours and the next two weeks. If we keep the momentum to the upside going, we're going to see new buying and prices will go higher."

Gold holdings in ETF Securities Ltd.'s exchange-traded commodities gained 0.3 percent yesterday to 8.37 million ounces, according to figures on the company's Web site.

"Our belief is that gold is underrepresented in investment portfolios," Marcus Grubb, managing director of investment research and marketing at the World Gold Council, said at a conference in London today. "Many investors are starting to re- evaluate gold as an investment."

Gold futures climbed 2.2 percent yesterday, the biggest gain since Sept. 2, after Australia unexpectedly raised interest rates, sending the dollar down 0.5 percent against the euro.

Inflation Talk

"There's talk of inflation re-emerging and continuing weakness in the U.S. dollar, which suggest the gold price may well continue to climb higher," said William Seddon, who helps manage about US$300 million at White Funds Management in Sydney.

Holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by the metal, increased 2.4 metric tons to 1,100.5 tons yesterday, data on the company's Web site showed.

Silver for December delivery in New York climbed 0.6 percent to US$17.40 an ounce. Holdings of silver in the ETF Securities products rose 1.1 percent yesterday to a record 20.97 million ounces, figures on the company's Web site today showed.

Platinum for January delivery gained 0.7 percent to US$1,333.90 an ounce. Palladium for December delivery rose 1.3 percent to US$314.20 an ounce. Palladium for immediate delivery rose as much as 2.3 percent to US$315 an ounce, the highest price since Aug. 14, 2008.

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