|ORO Y PLATA INTERNACIONAL S.A.
Momentum ushers gold above
LONDON (Reuters) 09/09/18. Gold powered through the $1,000 per ounce
psychological barrier on Tuesday, carried by a wave of pent-up technical
momentum and dollar weakness, with some analysts eyeing last year's
record high at $1,030.80.
Some investors were also seeing the spike in gold as a warning signal to
stock market bulls and were fretting about the result of central banks and
governments pumping billions of dollars into banking systems to boost
Spot gold rose to $1,007.45 an ounce, its highest since March 2008, when
bullion touched the $1,030.80 record. It was trading at $1,001.75 an ounce
by 1442 GMT (10:42 a.m. EDT), after briefly dipping below $1,000, and
versus $993.85 an ounce late in New York on Monday.
U.S. gold futures for December delivery rose to $1,009.4 an ounce, before
easing to $1,006.80 an ounce, versus Friday's close at $996.70 an ounce
before the U.S. long weekend.
"Gold's probably the most technically traded financial instrument in the
world," analyst David Thurtell at Citigroup in London.
"Where can it go? If it closes through $1,010 and plus tonight, you'd have
to think there would be a lot of very nervous shorts around that are getting
close to covering, and then it really could pop and go up another $50 quite
For a technical story on gold, see and for a snap analysis on gold's price
But the sustainability of the precious metal's rally above $1,000 an ounce,
which also helped boost palladium and silver to 2009 highs, was in
UBS analyst John Reade said in a note to clients that gold options had
moved sharply after breaking through $1,000.
"Today's move in implied volatility suggests...that a scramble for upside
gold options could lead the spot gold price higher," he said.
"We are unconvinced that all the ingredients are in place for a sustained
surge higher in gold," he added.
Implied volatility is a measure of demand for options, which investors use
to take advantage of, or protect themselves against, sharp movements in
Spot gold has now made three attempts to rise and stay above $1,000,
including Tuesday's push. The market stayed above the key level for one
day in February this year and three days in record-setting March 2008.
Despite gold hitting $1,000, it is far from an inflation-adjusted record, which
analysts at GFMS have put as high as $2,079 per ounce.
Some analysts have said the higher gold price reflects uncertainty across
markets about how central banks will untangle themselves from fiscal
stimulus aimed at reviving economic growth, as well as dollar weakness.
"Gold is celebrating because the day when inflation might return is getting
sooner rather than later," Ashok Shah, chief investment officer at London
"As long as the authorities are intent on not reversing their policies then
gold will remain in demand and it will be wanted."
Investment action took a break, with holdings in the world's largest
gold-backed exchange-traded fund, the SPDR Gold Trust, standing at
1,077.63 tonnes as of September 7, unchanged from Friday, denting the
price prospects for gold.
"We are still skeptical that this is a sustainable rally," said Andrey
Kryuchenkov, an analyst at VTB Capital.
"There is very little reason to be long gold, with already record spec long
positions accumulated in the market."
In other metals, silver hit a 13-month high of $16.81 an ounce and was at
$16.69 an ounce versus $16.29 an ounce. Palladium touched $296.50 an
ounce, its highest since September last year. It was last at $294.00 an
ounce versus Monday's $291.50.
Platinum was at $1,283.50 an ounce versus $1,255.00 an ounce on Monday.