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Gold price crosses 700 dollars per ounce in London and New York
By Perrine Faye
AFP
LONDON
Petroleumworld.com 05 10 06
Gold prices breached 700 dollars for the first time in 25 and a half years in both London and New York as investors ploughed cash into the precious metal amid rising concerns over the Iranian nuclear crisis.
On the Comex, a division of the New York Mercantile Exchange, gold for June delivery touched 701.50 dollars per ounce -- the highest level since October 1980.
On the London Bullion Market, the price of gold reached 700.80 dollars per ounce for the first time since September 1980.
"The scale of buying interest flowing into the market seems set to drive prices ever higher with the metal's 850-dollar all-time high now a realistic target," said James Moore, an analyst with specialist website TheBullionDesk.com.
Gold had struck the historic high point of 850 dollars in January 1980.
Meanwhile on Tuesday, platinum climbed to a record high 1,236.50 dollars per ounce on the London Platinum and Palladium Market.
Investors have sought refuge in gold and platinum because both precious metals are seen as a safe store of value in times of geo-political uncertainty, notably the current Iranian nuclear energy crisis.
News emerged on Monday that firebrand Iranian President Mahmoud Ahmadinejad had sent a letter to US President George W. Bush in a bid to ease simmering tensions over Tehran's nuclear ambitions.
"Initial reaction to the news (on Monday) sent oil and gold heading lower," added Moore.
"US officials have since said the letter fails to address international concerns while Secretary of State Condoleezza Rice said there was nothing new in it, allowing metal prices to rebound."
The White House said on Tuesday that the United States will have no formal written response to the letter.
Gold prices have also been supported by a weaker US currency, which makes precious metals priced in the US unit on world markets more attractive to buyers using other currencies.
Investors also regard gold as a safe store of value amid higher inflation caused by high oil price levels.
Gold prices could reach 850 dollars per ounce within the next two years owing to keen investment demand, according to a report published last month by London-based metals consultancy GFMS.
Meanwhile, rampant demand from the booming economies of China and India have also underscored recent strong gains in the metals complex.
Metals such as platinum have also been supported by weak global stockpiles and limited production.
AFP 05 09 06 1819 GMT
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