Gold prices surge to historic record of $1147

SINGAPORE (Commodity Online): Gold prices are surging day by day, in the wake of the weakening of the US dollar. Investors pouring in money to the bullion market led gold prices to a historic record of $1147.05 an ounce.

While spot gold was seen trading at $1147.05 an ounce, US gold futures for December delivery was at $1146.48 an ounce.

Prices have picked up significant upward momentum in recent weeks after news central banks are turning net buyers of gold pushed the metal through a series of key technical resistance levels to record highs.

Analysts said inflation worries and economic uncertainties continued to encourage buying.

Dollar dropped against its major rivals on Wednesday, as European shares posted gains for the fifth time in six sessions.

The dollar index, which measures greenback’s performance against a basket of six others, was down 0.37 percent, while the euro/dollar exchange rate firmed.

Dip in the dollar index added to momentum buying as prices broke through key technical resistance levels.

Gold also climbed in non dollar terms, hitting multi-month highs when priced in the euro, sterling and the Aussie.

Other commodities also climbed, with oil rising back toward $80 a barrel and copper to 13-1/3 month highs near $7,000 a tone. Both are being lifted by the weak dollar.

Gold traders are awaiting key U.S. consumer price index numbers later in the day for clues as to the next direction of trade, both due to its effect on the currency markets and on bullion itself, which is often seen as an inflation hedge.

Other metals futures also posted gains on Wednesday. December silver futures rose 27 cents, or 1.5%, to $18.66 an ounce and December copper gained 6 cents to $3.17 a pound.