Gold hits 25-year peak on waning dollar

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The Independent Online

The gold price smashed through the $600 an ounce barrier for the first time since 1981 yesterday as investors sought a hedge against inflation.

A fall in the dollar and a fresh spike in oil prices sparked a jump in gold prices in New York of as much as $9.40 to $601.9 an ounce.

The dollar fell to a seven-month low against the euro on Thursday, and oil extended this week's big gains to get nearer to last year's record above $70 per barrel.

Scott Meyers, at Pioneer Futures, said: "This is all on the dollar's problems, rising energy prices, the situation with Iran and also the general public always becomes more interested in metals when prices are rising."

The price of gold is still less than the peak of $873 an ounce achieved in 1980, when US inflation jumped more than 12 per cent.

"While few will predict $1,000 an ounce few would bet against it," Clem Chambers, the chief executive of ADVFN, a financial information firm, said. "With insufficient supply to meet consumption, uncertain political developments in the Middle East, inflation worries slowly but surely increasing and emerging markets... booming, it is hardly surprising gold is rising."