The following chart provides a update on the current 24h spot price of gold. Chart and commentary to follow ~

 

 

Gold, Platinum Rise to Records in London as Crude Oil Jumps

Jan. 3 (Bloomberg) -- Gold and platinum rose to records in London after crude oil reached an all-time high, prompting investors to buy precious metals as a hedge against inflation.

Gold extended gains after reaching $850 an ounce yesterday for the first time since 1980 as oil climbed to $100 a barrel. The metal added to a 31 percent rally last year, the biggest since 1979, that followed a surge in prices of commodities from wheat and soybeans to copper and lead.

``We have a long way to go in gold and platinum,'' Evy Hambro, managing director at BlackRock Investment Management Ltd., said today in a television interview in London. ``Gold was late to the party so just watch out.''

Gold for immediate delivery rose as much as $10.35, or 1.2 percent, to $867.90 an ounce in London, adding to a seventh straight year of gains in 2007. It traded at $865.30 as of 12:45 p.m. local time. Platinum gained 50 cents to $1,543 an ounce after rising to as high as $1,554.

Expectations the Federal Reserve will have to keep cutting interest rates to revive slowing economic growth are weakening the dollar and prompting money managers to buy gold as an alternative to the U.S. currency.

``People are still nervous about the dollar,'' said Bernard Sin, chief gold trader at Geneva-based MKS Finance, one of Switzerland's four precious-metals refiners. ``We are seeing a lot of fresh money coming in. $900 is the next level.''

 

Bhutto Assassination

Gold last year rallied the most since 1979, when the Iranian revolution crippled crude-oil exports and U.S. inflation surpassed 13 percent.

Rising fuel costs are again threatening to ignite inflation, while the U.S. is seeking United Nations sanctions against Iran as the country enriches uranium, which can be used in nuclear power plants or for weapons.

Investors also sought the safety of precious metals after the assassination of former Pakistani Prime Minister Benazir Bhutto sparked riots and delayed an election in the nuclear-armed nation that is a focal point of the U.S. war on terror.

Gold may trade ``well above'' $1,000 an ounce this year, with a price of $1,200 ``not out of the question,'' Ross Norman, director of London-based TheBullionDesk.com and a former trader of physical bullion, said yesterday.

The metal will probably average $800 an ounce, compared with $697.09 last year, according to the median estimate of 37 traders, analysts and investors surveyed by Bloomberg News at the end of December.

 

Gold Assets

Assets in the StreetTracks Gold Trust, the world's biggest exchange traded fund backed by gold, rose 39 percent last year to a record 627.88 metric tons.

The cost of borrowing gold for one year is 0.3158 percent, compared with an average of 0.25924 percent in the past 12 months, according to data compiled by Bloomberg. Rates reflect forecasts about the amount of metal available for borrowing.

In London, the 10:30 a.m. gold ``fixing'' rate used by some mining companies to price their sales rose $24.60 to a record $865.35 an ounce today. The fixing is conducted by telephone twice a day by five banks. The platinum fixing rate climbed $16 to $1,546, the highest ever.

Platinum rose 34 percent last year, posting a sixth consecutive annual gain, partly as strikes and accidents at mines in top producer South Africa curbed production.

Among other precious metals, silver increased 9 cents to $15.3351 an ounce and palladium fell $2.25 to $371.