Gold crosses $1000-mark

[anant1a]

Gold crosses $1000-mark

The precious yellow metal surpassed the record $1000 mark on Thursday, taking advantage of a weak dollar.

After reaching the milestone, gold stood at $US997.54 an ounce on the London Bullion Market, which compared with $US975.50 late Thursday.

Investors are pooling their cash into commodities like gold as they seek refuge from volatile world stock markets, the plunging value of the dollar and growing fears about a US-led economic slowdown, traders said.

Demand for the glamorous metal, which is used in jewellery, dentistry and electronics, is spearheaded by Asian economic giants India and China.

Gold, which is priced in dollars, becomes cheaper for buyers using other currencies when the US unit falls in value. The greenback slumped against both the European single currency and the yen overnight as fresh credit jitters swept across global markets, dealers said.

On the foreign exchange market the euro jumped as high as $US1.5625 overnight amid mounting concerns over the US economy, dealers said. The dollar also plunged below the key 100 yen level for the first time in 12 years, falling as low as 99.78 yen.

Gold has risen by about 17 per cent so far this year, underscored also by supply problems in South Africa - which is the world's largest producer.

At the start of January, the metal jumped above $US850 an ounce, smashing a 28-year-old record, and has been on an upward trend ever since. The precious metal is regarded as a safe haven in times of economic uncertainty and rising inflation.

At present, there are widespread fears that the US economy is lurching into recession and record oil prices of almost $US111 a barrel have stoked those inflationary pressures.

Global demand for gold is also surging because of increased jewellery purchases in China and India, according to the World Gold Council. Demand was additionally being fuelled by higher purchases of the metal by industry and wealthy individuals, it said.