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NY gold ends at highest level since mid-August
Thu Sep 8, 2005 4:44 PM ET
NEW YORK, Sept 8 (Reuters) - Gold futures in New York settled at their
highest level in more than three weeks after an early surge on technical
buying Thursday pushed prices through a key level of $450 an ounce.
But the yellow metal could pause before rallying further, investors and
traders said, on uncertainty whether the Federal Reserve will continue to
raise interest rates at its next meeting on Sept. 20.
Market players are vacillating between concern that damage from
Hurricane Katrina will slow the economy enough to make the Fed pause in
its series of rate increases, and the view that aid pouring into the U.S.
Gulf of Mexico region will help alleviate damage to the economy.
"You might see the market stall around at these levels for a little
bit," one floor trader said.
December delivery gold on the New York Mercantile Exchange's COMEX
division finished up $1.70 at $450.70 an ounce, after peaking at $453.90
and easing as low as $447.80. It ran through a series of stop-loss buy
orders at levels of $451, $452.50 and $453, early in the session. On Aug.
12, it hit an eight-month high of $455.30.
Carl Birkelbach, head of Birkelbach Management Corp. a Chicago-based
fund with $200 million under management, called the $450 breakthrough very
significant from a technical standpoint.
"To me that means that gold is probably on its way to the $500 dollar
area," he said, adding that the yellow metal could hit that level over the
next six months.
Final estimated volume stood at 70,000, compared with a more modest
level of 44,000 on Wednesday.
In Europe, gold jumped to its highest since early December 2004 on
Thursday afternoon as purchasing by an investment fund triggered automatic
buy signals, traders said.
In other commodities, U.S. oil eased after data showed U.S. crude oil
and gasoline stockpiles had not drained as much as expected after
Hurricane Katrina. But price bulls are encouraged by gasoline supplies,
which remain scarce, and a relatively optimistic global economic
outlook.
Katrina shut most of U.S. production in the Gulf of Mexico, stopped
offloading of imports at the country's only port that can handle
supertankers, and curtailed output at nearly two dozen refineries.
"From a fundamental standpoint inflationary problems are not going to
be solved instantly," Birkelbach said.
Spot gold reached $447.15/7.65 an ounce, after touching a new high for
the year of $449.40. On Wednesday in New York late trade, gold was quoted
around $444.80/445.50.
The London afternoon fix was $448.55.
Bullion hit its highest in 16-1/2 years last December at $456.75.
In other precious metals trade, COMEX December silver slipped 9.0 cents
to $7.028 an ounce. Spot silver rose to $6.97/6.99 from a late quote of
$7.04/7.07 Wednesday. It fixed at $7.04.
NYMEX October platinum settled up $4.50 to $913.40 an ounce. Spot
platinum increased to $908/912 from late levels of $903/907 Wednesday.
December palladium ended at $186.35, up $1.65. Spot stalled at
$182/185. (Reporting by David Brinkerhoff; editing by Matthew Lewis;
Reuters Messaging: david.brinkerhoff.reuters.com@reuters.net; E-mail:
david.brinkerhoff@reuters.com; Tel: +1 646 223 6033))
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