Gold prices were soaring to multidecade highs again Thursday amid a continued downward spiral for the greenback.
December-dated gold futures were tacking on $13.10 at $742.60 an ounce in frenetic action on the Comex division of the New York Mercantile Exchange. It marks the highest price for the metal since January 1980.
The bullion exchange-traded funds, which hold inventories of the metal, were also rallying. The
streetTracks Gold Shares
iShares Comex Gold Trust
were both up close to 2%.
has undermined the credibility of the U.S. currency as a reserve asset," says Philip Klapwijk, executive chairman of London-based metals consulting firm GFMS, speaking about Tuesday's rate cut.
He also points to a report in the British media saying oil-rich kingdom Saudi Arabia may cut its currency link to the dollar. Such a move would follow action already taken by Kuwait. Currently, the U.S. benefits from foreign central banks' willingness to hold vast quantities of dollars in their reserves.
The bearish sentiment saw the greenback drooping to all-time lows against the euro, sending gold prices flying even higher. Over time, the price of dollar-denominated assets, such as gold, tend to increase as the value of the U.S. currency dwindles.
(To see a discussion of gold,
Chart watchers say it's difficult to predict where technical resistance may kick in next and stall the current surge.
"In actuality there really isn't that sort of true resistance level ahead, since it's only touched those levels
above $730 a couple of times, and those only briefly," says Carlos Sanchez, a gold market analyst at New York-based specialty commodities firm CPM Group. "So we really are in uncharted territory here."
Resistance refers to points on charts that tend to slow the upward progress of prices.
The increasingly bullish fundamental and technical outlook for gold is reflected in surging demand for the bullion ETFs, with holdings of streetTracks Gold Shares, the largest such fund, now totaling 577 tons, up 100 tons, or $2.3 billion since the beginning of June.
In other metals market activity, copper futures were steady at $3.58 a pound, while silver prices were gaining 31 cents at $13.42 an ounce.
As for the precious metals patch,
said it would increase the value of its bid for
. It also lengthened the time it will give shareholders to consider the offer, until Oct. 2, according to press reports.
The news sent shares of Meridian up 8%, while Yamana was gaining 3%, both buoyed by the rising price of the metal.
In the farm sector, prices for orange juice futures were climbing almost 2% at $1.27 a pound. Cocoa prices were up 2.7% at $1,951 a ton. Cotton prices were dipping 0.6% at 64 cents a pound.