Gold settles at record high

Dear readers,

Gold is settling now at the US$830 mark steadily. Looks like central banks are not doing anything to push gold down. I’m currently waiting for any possible gold weakness before accumulating further.

Check out this article by CNNMoney.com

Gold settles at record high
Investors seek safe haven as the dollar falls on a report that China may diversify its exchange reserves, but one analyst sees rally fading.
By Ben Rooney, CNNMoney.com staff writer
November 7 2007: 3:27 PM EST
Source: CNNMoney.com

NEW YORK (CNNMoney.com) — Gold settled at a record high of $833.50 an ounce in New York trading Wednesday as the dollar’s decline and oil’s record surge caused inflation-wary investors to seek stability in precious metals.

The previous high was $825.50, set Jan. 21, 1980, or $2,128.09, adjusted for inflation, according to the Minneapolis Fed Calculator.

Trading in gold offers investors a hedge against stock market volatility because it is a store of value, compared to stocks, which are subject to a variety of unpredictable economic factors.

The euro hit a fresh record against the dollar, rising to $1.4729 before retreating. The dollar was dragged down by a report that a Chinese political figure said that Beijing should favor the euro, not the dollar, in diversifying its exchange reserves valued at $1.43 trillion.

Meanwhile, oil hit a new intraday record at $98.62 a barrel early Wednesday ahead of the government’s weekly inventory report that was expected to show a 1.6-million barrel drop in crude stockpiles. Oil’s drive to the $100-a-barrel mark slowed when it turned out that inventories were down slightly less than expected. Still, oil has surged more than 20 percent in the past month.

In addition to the dollar’s decline and oil’s rally, the ongoing fallout of the credit crisis has investors flocking to the relative safety of gold.

But one analyst wasn’t so sure the metal will stay in record territory.

Safe-haven buying accounts for only one third of gold consumption, according to Jon Nadler of Kitco Bullion Dealers. He says most gold is used to make jewelry, with the biggest demand coming from India and the United States.

“If consumers in India and the U.S. deem the price of gold unacceptable you will begin to see a big shift,” Nadler said.

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