Tags: Gold | Breaks | Through | $600

Gold Breaks Through $600

Thursday, 06 April 2006 12:00 AM

Gold futures climbed to over $600 an ounce this morning, a new 25-year high for the metal. Other metals, such as silver and copper, also jumped.

Gold broke through the $600 barrier without any particular news leading the charge, a signal that traders are bidding the metal higher on its own merit. Gold is up over 15% this year.

With gold trading above $600, funds may be inclined to add to their winning positions -- a move that would push gold even higher.

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In addition, consumption in China and India are big drivers of gold prices. Gold jewelry is regarded as a status symbol in both countries, and a popular wedding gift in India. As the two countries grow their middle and upper-middle classes, they should continue to demand more gold.

"Funds have been the biggest buyers of gold this year, outpacing purchases by jewelers, who accounted for 73% of demand last year, the London-based World Gold Council said in a March 29 newsletter," says Bloomberg News.

Gold usually trades at the inverse of the U.S. dollar. Meaning that, when the dollar is down, gold is generally up. In early morning trading, the dollar was mixed - down against the pound sterling, but up against the yen and the euro.

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Gold's all-time record high was $850 an ounce in January 1980.

Silver hit a 22-year high. Silver, sometimes referred to as gold's stepsister, traded at $12 an ounce this morning.

Analysts believe that silver's run is being driven by the new silver ETF that is in the works. The silver ETF will be backed by silver bullion, driving up the demand for silver.

Copper and zinc also hit record highs this morning. Copper is up 30% this year, and has nearly doubled in price in the past two years, according to Reuters. Bloomberg News reports that zinc is up 46% in 2006.

Platinum climbed more than $17 to $1,098 an ounce. Palladium added more than $13, jumping to $356 an ounce.

Precious metals and commodities overall have enjoyed a bull market since 2003. With the introduction of new ETFs, fund managers flocking to commodities, and the rapid growth of China and India, precious metals are clearly in store for a long-term bull market.

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Gold futures climbed to over $600 an ounce this morning, a new 25-year high for the metal. Other metals, such as silver and copper, also jumped. Gold broke through the $600 barrier without any particular news leading the charge, a signal that traders are bidding the metal...
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2006-00-06
Thursday, 06 April 2006 12:00 AM
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