Gold hits new 25-year peak, sentiment upbeat

LONDON: Gold glittered on Friday as investor interest buoyed by firm oil and geopolitical worries pushed the metal to a new 25-year high, just $15 away from the next big target of $700 an ounce.

Gold was becoming increasingly vulnerable to a sharp correction, but upbeat market sentiment prompted market players to buy more, dealers said.

“The speculators and long-term players are adding to their positions. The overall situation hasn’t changed. It’s Iran, it’s the dollar, it’s inflation,” said Wolfgang Wrzesniok-Rossbach, head of precious metals at Heraeus. He saw gold trading in a range of $675 to $690.

Spot gold rose as high as $684.10 an ounce before easing to $681.50/682.50 against $676.90/ 677.90 in New York late on Thursday. Gold, which jumped to a record high of $850 in early 1980, has gained 32 percent this year.

Dealers said gold was seen as technically overbought but tension in the Middle East, high oil prices and a volatile dollar would underpin the metal.

The dollar fell half-a-percent against the euro on Thursday, making gold cheaper for holders of other currencies.

Gold mining companies cheered after recording strong financial results on the back of high prices. South Africa’s AngloGold Ashanti Ltd, the world’s third biggest producer, posted a more than doubling of adjusted first quarter earnings per share on Friday. Reuters